The lawsuit over the sale of Fayetteville’s Chancellor Hotel isn’t the first time the two former owners have gone to court against each other.
Earlier this month, Whispers reported on a lawsuit filed in Washington County Circuit Court related to the December 2018 sale of The Chancellor Hotel in Fayetteville.
The short version is that Ike Thrash and his sons of The Thrash Group in Hattiesburg, Mississippi, sold their 60% ownership share of the hotel in January 2018 to Darryl Schulte of Louisville after negotiating with AJ Capital Partners of Chicago. Part of the agreement to sell to Schulte, the lawsuit claimed, was that Schulte wouldn’t sell to AJ Capital in “the immediate future.”
Schulte then sold the hotel to AJ Capital less than one year later. AJ Capital paid $31 million for the hotel and plans to convert it to a Graduate Hotel this fall.
The Thrashes claim Schulte violated their agreement and owes them $1.5 million — what they consider their share of the profit from the flip. The Thrashes also accused Schulte, whose company manages 150-plus hotels in 23 states, of mismanaging the Thrashes’ other hotels, including one in Fort Smith.
A spokesman for Schulte Hospitality Group sent Whispers this statement:
“We are aware of the retaliatory lawsuit filed against us and the other defendants in Arkansas concerning The Chancellor Hotel. Simply stated, the allegations in the complaint are unfounded and untrue.
“The complaint is filled with inaccuracies and misstatements, including the failure to mention that this is part of a larger dispute that is already the subject of litigation we commenced in Kentucky. We will work with legal counsel to vigorously defend against the Arkansas lawsuit in every respect.”
Schulte, it turns out, had already sued The Thrash Group in Louisville in mid-May for firing his management company without the proper 60-day notice.
Schulte’s management company had agreements with at least six of Thrash’s hotels across the country, including the DoubleTree by Hilton in Fort Smith.
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