Hyatt hotel chain to stay in control of Clive Palmer’s Coolum resort despite allegations of mismanagement

Hotel giant Hyatt Hotels Corporation has blocked an attempt by billionaire Clive Palmer to remove it as the manager of the Coolum resort on the Sunshine Coast, after Palmer accused Hyatt of poor management and siphoning $60 million in funds from the resort over the past 20 years. 

Hyatt took Palmer to the Brisbane Supreme Court yesterday after Palmer had announced he had dumped the company as the manager of the resort, removing its signage and sacking Hyatt's general manager, Maurice Holland.

Hyatt argued that Palmer had breached the contract between the two by trying to remove it as resort manager and by sacking the general manager.

Palmer represented himself in court, and told Justice Glenn Martin that the resort could still be run without Hyatt, and that the general manager, Maurice Holland, was sacked in the resort's best interests in mind.

While Palmer threatened to close the resort if the injunction was granted, Martin granted it anyway.

"(I'm satisfied) there will be sufficient funds... to cover the short-term of the injunction I propose and secondly, the defendants good corporate citizens will not abuse their position if an injunction is granted for such a short period."

Martin said the injunction would protect Hyatt's reputation, get Holland his job back and protect the interests of those who own villas within the resort.

The case will return to court on March 1.

The action came after Palmer released a statement yesterday saying the company had been siphoning $60 million in funds over the past two decades "back to their headquarters in Chicago and there has been a major cover-up of these activities".

"We have uncovered this activity since taking over the resort last year. This should be of concern to the operators of other Hyatt resorts around Australia and worldwide. The Hyatt hasn't given the property the priority it deserves. The Hyatt Group doesn't even have a full-time employee in Queensland and we believe they are not even represented in Australia."

Hyatt's lawyers said in court that the allegation was false.

Palmer, who bought the resort in July of last year, said that despite Hyatt running the resort for over 20 years, "it has just led to millions of dollars in losses to the owners". He also commented he was surprised to learn staff were never paid bonuses.

The move comes just a day after Palmer threatened the Football Federation of Australia with court action if it tried to take away his licence – the billionaire has garnered a reputation for himself in the sport, sacking players and making controversial comments about the state of the game.

This article originally appeared on SmartCompany.