Cheeca Lodge Arbitration With RockResorts Is Settled

ISLAMORADA, Fla.- Cheeca Holdings LLC, owners of the newly renovated Cheeca Lodge in the Florida Keys, have announced that the arbitration proceeding with RockResorts Inc., the hotel’s former management company has been decided. Cheeca Lodge terminated its contract with RockResorts in March 2006 and remains independently owned and operated.

In the arbitration, the Arbitrator ratified and confirmed Cheeca’s legal and/or contractual right to terminate the remaining 27 years of the Hotel Management Agreement, although RockResorts would be due some compensation for having the Agreement terminated before such time.

The Arbitrator noted that it is a common industry practice for hotel management agreements to be terminated prior to the full term of the contract. Thus, this Award reflects a discounted price that Cheeca must pay to be unencumbered of the long-term management agreement with RockResorts, which the Arbitrator described as having been plagued with “shortfalls” in its performance.

From Cheeca’s point of view: “It is unfortunate we had to go through the legal process to end up with an amount that was approximate to what we offered to settle prior to entering litigation. We are extremely proud of our Florida Keys’ 27-acre beachfront resort, featured recently on the cover of Conde Nast Traveler and in The New York Times. We are committed to continue delivering a superior resort experience and exceeding the expectations of guests at this historic resort. With this resolution behind us, we will go forward with our plans to greatly enhance this already outstanding property.”