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INN
OWNER'S SUITE LIFE
Two
financial investigations have since concluded that Field...used
the Crowne Plaza and Holiday Inn as virtual piggy banks. But
even as he was siphoning money from the hotels, Field was refusing
to give a decent contract to his workers.
ON DEC. 30, 2005, Juliana Boateng, a $10-an-hour housekeeper at the
Crowne Plaza Hotel at LaGuardia Airport, arrived
for work about 8:15 a.m., as she normally does. But instead of cleaning
guest rooms that day, Boateng claims in a sworn affidavit, she and
another maid were ordered to spend the entire day cleaning the Manhattan
townhouse residence of the son of Crowne Plaza owner Martin
Field. Boateng's assignment was more than unusual, given
that Field's hotel was then - and still is - under the control of
a federal bankruptcy judge.
In October 2004, Field sought Chapter 11 protection in U.S. Bankruptcy Court in Philadelphia for the Crowne Plaza and the Holiday Inn at Kennedy Airport, two of the three hotels he owns in this city. Two financial investigations have since concluded that Field and a web of affiliate companies controlled by him used the Crowne Plaza and Holiday Inn as virtual piggy banks. But even as he was siphoning money from the hotels, Field was refusing to give a decent contract to his workers. His declaration of bankruptcy came just one month after Local 6 of the hotel workers union began labor strikes at both the Crowne Plaza and the Holiday Inn - walkouts that still continue. The bankruptcy petition short-circuited an attempt in New York State Supreme Court by Field's biggest creditor, SunTrust bank, to place his two hotels into receivership after their default in May 2003 on more than $87 million in city-backed bonds that originally financed their construction. Instead of paying normal hotel expenses and the debt service for the city-backed bonds, Field and his affiliated companies engaged in "inappropriate transactions and allocations, such as 'double-billing' for management fees, overcharges of transportation costs, and inequitable sharing of costs . . . ," an investigator for American Express concluded in April 2004. Among the shocking practices the investigators uncovered: On Jan. 3, 1989, the Holiday Inn obtained a $5 million loan from a commercial bank, then eight days later transferred $4.4 million to Field in a personal loan, most of which has not been paid back. In 2001 and 2002, the hotels improperly transferred more than $3.6 million to a Field-controlled van company that provided free shuttle service between the airports and the hotels. Nearly $2.1 million of that money was in overcharges, and the van company, Guest Transportation Services Inc., in turn distributed $1 million to Field in 2002. New Penn Management, a Pennsylvania-based firm controlled by Field, received $3 million in management fees between 2001 and 2004 from a half-dozen hotels Field owns - including $1.8 million from the Crowne Plaza and Holiday Inn. New Penn then paid out $2.3 million to Field in profits and consulting fees, while at the same time it double-billed the hotels for the salaries of its own employees. Expenses at the Hampton Inn at Kennedy Airport, another Field hotel adjacent to the Holiday Inn, were charged for years to the bankrupt hotel - including guest meals, marketing and waste removal. According to an investigator assigned by the bankruptcy court, the Crowne Plaza and Holiday Inn served "another purpose, which was to satisfy the cash needs of Field and the nondebtor affiliates." Neither top officials at Field's Valley Forge, Pa., headquarters nor lawyers for his firm returned repeated calls last week for comment. Despite all his financial troubles, Field is doing quite well. In a 2002 letter uncovered by investigators, he claimed his Pennsylvania home was worth $4.9 million and his collection of antiques and art had been appraised "in excess of $8 million." This week, there will be another hearing in the long-running bankruptcy fight. Field is trying to convince U.S. Bankruptcy Court Judge Stephen Raslavich to let him reorganize the hotels and continue to operate them. SunTrust, on the other hand, wants to take control away from Field. The bank's lawyers claim it can reach an amicable labor contract with the striking union members and still make a profit. Meanwhile, City Hall, whose loan guarantees are essential to any deal, declared its opposition this month to Field's plan. It's now up to the judge to decide if shell game operations like Field's deserve to be rewarded. |
