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Court rules in favor of John Q. Hammons, defeats $93M damage claim

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Earlier this month, the Delaware Court of Chancery ruled in favor of Springfield hotelier John Q. Hammons in a case that challenged a $1.4 billion transaction in 2005 that made John Q. Hammons Hotels Inc. a private company. The ruling defeated a damage claim for more than $93 million, according to a news release from law firm Husch Blackwell LLP, which defended Hammons.

The challenge was based on claims that Hammons breached his fiduciary duty in connection with the transaction, aided and abetted by third-party acquirers, the release said.

Attorneys with Husch Blackwell also handled the unique original transaction.

The shareholder class-action suit was led by minority shareholders Jolly Roger Fund LP, Jolly Roger Off Shore Fund Ltd. and Lemon Bay Partners, the release said.

The shareholder class sought damages in excess of $93 million. The going-private sale, which closed in September 2005, covered the sale of 44 hotels in 20 states and the management of 22 additional hotels in seven states.

After a trial, Chancellor William Chandler issued an opinion holding that Hammons had breached no duties and the price received by shareholders was fair.

In late 2010, Hammons, 91, stepped down from the top post at Hammons Hotels due to health reasons, and Jacquie Dowdy, a 38-year veteran with the company and former vice president of finance, is now CEO, according to Springfield Business Journal archives.
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