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Capella Dispute Rumbles On

Date Published:

Many will have been aware of the back and forth dispute over ownership of the former Capella Pedregal property and in a new twist, a New York Supreme Court on Wednesday (12th) denied Capella Hotels & Resorts the authority to reclaim the former Capella Pedregal.

The ruling reversed the previous decision from a New York Supreme Court on Nov. 7 to reinstate control to Capella Hotel Group after the property was overtaken by co-owner CarVal Investors. It allows ownership group Hoteles del Cabo to assume full management of the property and rename it The Resort at Pedregal.

The history of this dispute goes back to Nov. 3, when CarVal seized management of the property amid a flurry of accusations of mismanagement. The next day, Capella Hotel Group released a statement stating the seizure was illegal and “in breach of CHG’s long-term contract with Hoteles del Cabo, the owner of the property.” The statement continued “Capella Hotel Group has a valid and binding contract with Hoteles and CarVal has violated this agreement” and “Without any official notification or show of cause letter from the representatives of CarVal Investors, we were informed that CHG management was being instructed to leave the property.”

After the court’s ruling to reinstate control to Capella Hotel Group, Hoteles del Cabo released a statement stating Capella misappropriated funds, conducted suspect accounting and withheld funds specifically raised to assist property team members and their families after Hurricane Odile struck in September.

The statement noted that $125,000 had been distributed to employees, but "Capella is holding tens of thousands of dollars intended specifically to help hotel associates get their lives back in order following the horrific storms that have plagued Cabo recently. For reasons beyond our knowledge, they have opted not to distribute those funds.”

On Wednesday, a statement from Hoteles del Cabo read: “A decision issued today in the New York State Supreme Court confirmed that the Resort at Pedregal will go forward under the new name and management. The court denied applications by the former management company to take back the resort and return it to the Capella brand.”

This dispute has damaged many reputations in the resort, and by the looks of things it is far from over.

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