A snag tied to the Ivan Boesky stock trading scandal has temporarily delayed the sale of the Beverly Hills Hotel owned by Boesky's wife and her sister's family, an informed source said Wednesday night.
Two daylong sessions to sell the landmark hotel were conducted Tuesday and Wednesday by Brooks Harvey, the real estate subsidiary of Morgan Stanley & Co., the New York investment banking firm. It had been expected that a high bidder would be selected by Wednesday afternoon.
But no final deal was made Wednesday because Seema Boesky, a New York resident, was apprehensive that proceeds from the sale could become entangled in litigation stemming from the broadening government investigation of her husband's insider stock trading activities, said the source who attended the sales sessions in New York City.
Under a legal settlement with the Securities & Exchange Commission, Ivan Boesky agreed to pay $100 million in penalties and to plead guilty to a federal felony charge of securities fraud and to submit to permanent barring from the U.S. securities business.
Already, in New York, the first class-action lawsuit has been filed against Boesky, seeking damages for his insider trading in stocks of companies that were takeover targets.
Seema Boesky owns 52% of the stock of the Beverly Hills Hotel Corp., which, in turn, owns Northview Corp., the San Diego firm which manages several hotel properties.
Seema's sister, Muriel Slatkin of Beverly Hills, her estranged husband, Burton, and their two sons, Edward and Thomas, own 48% of the hotel's stock.
Both families had spent the better part of this year feuding in and out of court over allegations that Ivan Boesky had misappropriated hotel funds during his stock trading adventures and whether the hotel should be sold at all.
Approximately two dozen people, including sisters Seema--but not Ivan Boesky--and Muriel Slatkin, the two Slatkin sons and several lawyers attended the meetings at which all of the bids were opened, the source said.
Neither Seema Boesky nor Muriel Slatkin could be reached for comment on the sale.
Minimum bid for the hotel, the fabled home away from home of entertainment greats which next year will celebrate its 75th anniversary, was set by Morgan Stanley at $100 million.
A number of potential buyers have been reported interested in purchasing the hotel, including Denver oil man Marvin Davis, real estate developer Donald Trump of New York, Jay A. Pritzker of Chicago, chief executive of Hyatt Hotels Corp., entertainer Merv Griffin of Los Angeles and the Sultan of Brunei, the ruler of a southeast Asian monarchy.