NEW YORK (CNN/Money) -
Hotel manager Marriott International Inc. may have pocketed millions of dollars of kickbacks from suppliers, according to a lawsuit filed by one of the hotel chain's largest owners, a newspaper reported Friday.
The lawsuit, which was unsealed in U.S. District Court in Delaware Thursday, was first filed in April and offers a glimpse of the increasing tension between hotel owners and management chains amid a slowdown in the U.S. travel industry, the Wall Street Journal reported.
Hong-Kong-based CTF Hotel Holdings Inc. alleges that Marriott (MAR: down $1.24 to $41.49, Research, Estimates) and Avendra LLC, a hotel-purchasing operation Marriott and four other hotels created, breached fiduciary duty and engaged in racketeering and commercial bribery. CTF is seeking a jury trial and unspecified compensatory and punitive damages.
CTF alleges in the lawsuit that Marriott was "secretly soliciting, diverting and fraudulently concealing kickbacks from Molloy Corp." Molloy is an outside contractor Marriott hired to supply hotels with audiovisual services. CTF claims Molloy charged three times its actual invoices and that Marriott pocketed two-thirds of those fees, at least $1.7 million, instead of passing it on to the hotel owners. Marriott eventually reimbursed CTF, the paper reported.
Additionally, CTF alleges that Marriott, as a founding member of Avendra, solicited possibly millions of dollars in commercial bribes from hotel vendors. In exchange, Avendra and Marriott agreed to use those vendors' services. The kickbacks were hidden from the owners and kept by Marriott.
Marriott called the suit inflammatory, adding that it did not do anything without CTF's knowledge, the paper said.
CTF said Marriott allowed Avendra to take a markup on goods purchased, such as linens, china, cleaning supplies and food and beverages, from hotel vendors. Marriott then allegedly retained some of the markup, and the vendors were guaranteed access to the hotels and the ability to market goods and merchandise.
CTF claims such practices restrict its vendor choices and force it to pay higher prices for goods. The payments violate the Robinson-Patman Act, "causing CTF competitive injury," the suit said.