OTK Associates LLC, the largest shareholder of Morgans Hotel Group Co.
MHGC with 13.9% of the outstanding common stock of the
company, today commented on Morgans' agreements with The Yucaipa
Companies.
As the largest shareholder of Morgans, OTK Associates is deeply
concerned by the company's announcement of a material transaction with
an insider and major creditor during an ongoing proxy process. OTK
Associates questions whether the board's special committee has
appropriately considered, in earnest,alternatives to consummating yet
another ill-timed transaction with an interested party,especially given
that two of Morgans' directors have a significant financial interest in
the transaction.
Furthermore, the attempt
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