Biltmore Battle Rages On
As reported in last week’s MoJo online newsletter, the legal battle between Biltmore owner Ty Warner and hotel management company Four Seasons rages on, with Warner filing a petition at the United States District Court, Southern District of New York, asking that the Courts step in to appoint arbitrators to hear the dispute between the two sides.
Mr. Warner served notice to the Four Seasons in March 2021 terminating their long-term agreements at both the Four Seasons Santa Barbara and Four Seasons New York after accusing the Four Seasons of mismanagement of the hotel properties; he says the Four Seasons was in violation of its contractual and fiduciary duties, to the financial detriment of Mr. Warner. The filing states that the owner has invested hundreds of millions of dollars into the hotels to fund extensive renovations and perform ongoing maintenance, and to support day-to-day operations, and that the Four Seasons did not uphold its duties to maximize profits and minimize costs while operating the properties consistent with the standard of world-class luxury hotels. The Four Seasons contested the termination of the agreements and has refused to vacate the properties.
An arbitration agreement between Mr. Warner and the Four Seasons provides that their dispute shall be resolved by a panel of three arbitrators. For more than five months, both sides have attempted to constitute the panel of arbitrators, and they have collectively exchanged eight lists of potential arbitrators and considered 65 different candidates. The parties have not reached an agreement on even one arbitrator, let alone the three that are necessary to form the panel. “The parties are trapped in a selection process that has proven fundamentally unworkable and lacks any mechanism for breaking the existing deadlock,” reads the Court filing. “Without a panel in place, the parties cannot proceed with their arbitration and [Mr. Warner] cannot have [his] claims against Four Seasons heard and resolved on the merits.”
The Four Seasons Resort the Biltmore was shuttered at the beginning of the COVID-19 pandemic, and has yet to reopen in over two and a half years. Warner maintains that he has no plans to sell any of his Montecito properties, which include the Biltmore, the Coral Casino, Montecito Club, and the San Ysidro Ranch. He told the Journal last year that he is using the property closure as an opportunity to reinvest in the beloved resort.
The petition was filed on October 31, 2022. We’ll have more on the future of the Biltmore as this story unfolds.