Ueberroth, Companies Sued for $50 Million

SANTA ANA —  A Los Angeles man who claims a 30-year business relationship with entrepreneur Peter Ueberroth has sued him and several of his present and former companies and advisors for $50 million.

The suit, filed by Wallace G. Smith, said Ueberroth and the others reneged on a deal that would have paid Smith fees for helping arrange hotel acquisition deals.

Ueberroth, a Laguna Beach resident, could not be reached for comment.

The suit, filed Wednesday in Orange County Superior Court, claims that Smith had a contract with Ueberroth and his businesses to find and develop potential hotel deals.

Smith said that in 1991 he prepared a report analyzing the Red Lion Hotel Group as a potential acquisition candidate. At the time, Smith was working on behalf of Ueberroth’s Contrarian Group and a Ueberroth-controlled hotel company, Guest Quarters Suite Hotel.

Guest Quarters then was acquired by Doubletree Hotel Systems Inc., according to the suit.

The suit says Ueberroth, a member of Doubletree’s board, terminated the written contract with Smith in 1995, but Smith was given verbal assurances that he would be compensated if any deals he’d previously identified were consummated.

A year later, Doubletree acquired Red Lion.

Smith’s suit claims the deal was based on material he developed in 1991 but that Ueberroth, Guest Quarters and Doubletree all denied his role and said he was not owed any transaction fees or other payments.

The suit seeks $20 million in fees owed for the Red Lion acquisition and “perhaps an additional $20 million to $30 million” for other, still unidentified transactions based on Smith’s deal development work before 1995.