Morgans Hotel Group Issues Statement on OTK Associates

Morgans Hotel Group

today issued the following statement to its shareholders: "Given the needlessly inflammatory and disingenuous statements in the latest press release issued by OTK Associates in support of their effort to take complete control of our Company for no consideration, we urge shareholders to review our upcoming earnings announcement, prospectus related to the rights offering and our proxy statement and other materials which will be filed with the SEC in the coming weeks.  In these filings, we will reinforce the strategic and financial rationale for the transformative transaction we announced on April 1st, its numerous benefits for shareholders and key background details.  We will, for example, highlight that we hired a leading firm to market the Delano South Beach to prospective buyers and that the transaction entered into was the most attractive for Morgans and all our shareholders.  Considering the fact that OTK has a representative on the Board who was a member of the special transaction committee formed in December 2011 to evaluate, negotiate and recommend to the Board various deleveraging and other strategic alternatives, including a possible sale