May 29–The father of one of the founders of the Ace Hotel boutique chain — which includes a hotel in downtown Portland — is suing his late son’s business partners, claiming they have “demanded” to buy his dead son’s interests in Ace Hotel Portland at a steeply discounted price.
Alexander Calderwood died at age 47, suddenly, in a room in Ace Hotel London on Nov. 14, 2013. A lawsuit filed Thursday by his father claims that “just three weeks after Alex’s death,” Calderwood’s three business partners tried to buy-out Calderwood’s shares in Ace Hotel Portland “for the lowest possible price.” The suit also claims that they didn’t have the contractual right to do so.
The suit asks that a Multnomah County Circuit Court judge or jury declare that Calderwood’s estate doesn’t have to sell its shares in Ace Portland. But the suit states that if a judge or a jury deems that the estate has to, those shares be sold at no less than $3.7 million, which is more than three times the $1.1 million or $1.2 million offered by Calderwood’s partners, according to the lawsuit.
Calderwood’s father, Thomas Calderwood, is the sole beneficiary of Alexander Calderwood’s estate.
None of the three Ace Hotel Portland partners — Seattle residents Douglas Herrick and Wade Weigel, and Portland resident Jack Barron — could be reached immediately for comment for this story. They are listed as defendants, along with Ace Hotel Portland LLC.
“Alex Calderwood has been described as a ‘business genius,'” reads the suit. “A Washington native, he parlayed his affable nature, work ethic, and sense of style into multiple successful business ventures.”
One example cited in the suit: “…(In) 1992 Alex and his friend, defendant Weigel, had an idea to create a ‘rock and roll’ barber shop. The next day, armed with $12,000, they went looking for spaces. Rudy’s Barbershop was born. Today there are 17 Rudy’s Barbershop locations in Seattle, Portland, New York, and Los Angeles.”
The suit states that in 1999, Calderwood and Weigel turned a 28-room “flophouse” in Seattle’s “run-down” Belltown neighborhood into a chic hotel. The hotel was lauded in Calderwood’s New York Times obituary as pioneering at the time for its “reclaimed furniture and touches like street art, turntables in rooms and low prices.”
The suit states that Calderwood expanded the Ace Hotel to Portland in 2006 — working with Weigel, Herrick and Barron to “develop, position, market and manage” it. In 2007, the Portland location opened for business at 1022 S.W. Stark St., in the old Clyde Hotel.
The suit states that Calderwood grew Ace Hotel into a successful international chain — eventually opening additional hotels in New York, Palm Springs, London and Los Angeles.
A 2011 profile of Calderwood in The New York Times was titled “The Man Behind the Ace Empire.” It quoted Calderwood as saying: “‘We’re not trying to be a quote-unquote hip hotel, per se,’ said Alex Calderwood, a pale, curly-haired 43-year-old. Wearing a T-shirt, Levi’s and sneakers he designed in collaboration with Converse, he could pass for one of the stylishly unobtrusive guests.”
The suit doesn’t specify whether Calderwood owned shares in the other hotel locations besides in Portland. But it states that each of the four partners — Calderwood, Weigel, Herrick and Barron — owned 25 percent of Ace Hotel Portland.
The suit claims that the three remaining business partners unfairly pointed to an appraisal stating Ace Hotel Portland was worth $6.5 million, or $85,000 per room. The partners then gave themselves a 30-percent discount — based on disputed language in a contract — before offering $1.1 million for Calderwood’s 25-percent share of the hotel, according to the suit.
They later offered $1.2 million, the suit states.
But the lawsuit faults the partners for “failing to justify” the per-room valuation. The suit claims that “comparable hotels had actually sold at much higher rates, including the Hotel Rose at $203,000 per room and the Hotel Modera at $273,000 per room.”
The lawsuit was filed by Portland attorneys James T. McDermott and Ciaran Connelly at the firm Ball Janik.
Read the lawsuit here.
— Aimee Green
503-294-5119
