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Hotel Indigo Sued for Breach of Contract Over Rooftop Bar Dispute

Posted on Jan 01, 2016

New York restaurateur Shaun Smith has filed a breach of contract lawsuit in New York State Supreme Court against the owners of the trendy Hotel Indigo. Mr. Smith claims that he was tricked into opening up a lounge on top of the hotel in 2012 when hotel organizers failed to disclose that they did not obtain the city’s permission for the bar. Mr. Smith opened the lounge in September as complement to his ground floor restaurant, China Latina. 

According to Mr. Smith, the lease that he entered into with Hotel Indigo involved a rent payment of $120,000 per month. This rent included the ground floor restaurant space as well as the rooftop area. The lease term was for ten years. In addition, Mr. Smith was required to give Hotel Indigo a portion of the revenue from the rooftop bar. 

After just five months of operation, New York City police arrived at the lounge with a summons. The summons stated that the hotel had never obtained a certificate of occupancy for the rooftop bar. Further, Mr. Smith claims that the hotel did not disclose that it had received an earlier warning about the illegal operation. The warning allegedly occurred via a summons which was handed to a hotel employee on December 3. 

Lawyers for Mr. Smith claim that he was fraudulently induced to enter into the lease because Hotel Indigo stated that they had the authority to run a rooftop bar. Mr. Smith is seeking at least $5 million in damages. He claims that he invested millions in setting up the bar, hiring employees, and paying salaries.

To learn more about breach of contract and other business litigation matters, contact a New York breach of contract attorney today at (888) 497-3410.

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