Beverly Hills Hotel at Center of Boesky Family Feud
BEVERLY HILLS, Calif. (AP) _ Ivan F. Boesky’s insider-trading scandal is only the latest of his problems.
For the past five years, he and his wife, Seema, have been feuding with Seema’s sister and her husband over the fate of the venerable Beverly Hills Hotel, the posh pink inn that is home to the Polo Lounge celebrity watering hole.
The famed hotel, which sits surrounded by flower gardens on 16 acres of prime real estate on Sunset Boulevard, is being sold.
Final sealed bids of a minimum of $100 million were received on Friday, and a buyer is expected to be selected by the end of the week. The price the hotel will fetch may go as high as $200 million, observers say.
William Barhenburg Jr., an official of the realty unit of Morgan Stanley & Co. that is handling the sale, said bidders ″are coming from all over in all shapes and sizes.″
The Boeskys will get 52 percent of the proceeds, equal to their stake in the hotel. Seema’s sister, Muriel Slatkin, and her husband, Burton, will get the rest.
The Boeskys had not wanted to sell the resort, but finally agreed to put it on the auction block after years of feuding and a lawsuit filed in May by the Slatkins against Ivan Boesky, accusing him of using hotel money to invest in high-risk, and eventually unsuccessful, stock arbitrage.
That suit was dismissed in September by a federal judge in Los Angeles, but Muriel Slatkin says she is considering revising and refiling it.
Earlier this year, in a 36-page declaration filed in federal court in response to the Slatkin suit, Seema Boesky accused the Slatkins of ″offensive and abusive treatment″ and ″extortion″ in efforts to put the hotel on the market.
While sale of the hotel ends financial ties between the Boeskys and the Slatkins, it is not expected to do much to ease strained relationships.
Seema and Muriel have not spoken to each other in five years. When when they talk about each other, it is not uncommon for them to spew some venom.
Muriel calls Ivan Boesky ″greedy″ and ″pompous,″ a ne’er-do-well who could not hold a job until Seema inherited $700,000 after the death of her mother 10 years ago, allowing Ivan to launch his career as a stock speculator.
In the past decade, Boesky became one of Wall Street’s most successful risk arbitragers, buying stock of takeover targets on speculation that it would rise and he would earn a handsome profit.
But his empire came crashing down Nov. 14 when he settled insider-trading charges brought by the Securites and Exchange Commission by agreeing to pay $100 million in penalties and withdraw from securities trading in the United States, except for his own accounts.
The Beverly Hills Hotel was acquired in the 1950s by Michigan real estate tycoon Ben L. Silberstein, who ultimately turned it over to his family. Seema and Muriel each received 48 percent, and the remaining 4 percent went to a nephew, Royal Marks.
The Boeskys bought out Marks’ holdings to give them control of the hotel.
Not long afterward, the Boeskys stripped Burton Slatkin of his job as chief executive of the hotel, instead giving him the title of board chairman. Ivan Boesky assumed the real power. Relations between the Boeskys and Slatkins then went from bad to worse.