Real Estate

Bennett Sued for Dallas Express Use in Shareholder Battle

Investor accuses Monty Bennett of using nonprofit media to sway shareholders, amid Ashford's $150M loan defaults and lawsuits.

By Doug Elli

4/12, 19:04 EDT
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Key Takeaway

  • Monty Bennett is sued for allegedly using his nonprofit media outlet, the Dallas Express, to unlawfully influence shareholders in a proxy fight.
  • The lawsuit highlights over $3.4 million in "donations" to the Dallas Express by Bennett, against its $24,000 advertising revenue and $3 million expenses.
  • Ashford Hospitality Trust faces financial challenges, with missed loan payments on 19 hotels and ongoing legal battles with lenders.

Legal Battles and Financial Struggles: The Ashford Saga

Monty Bennett, the chairman of Ashford Hospitality Trust, a Dallas-based company that owns 100 hotels nationwide, finds himself embroiled in a multifaceted legal and financial quagmire. At the heart of the controversy is a lawsuit filed by an out-of-state investor, Jason Aintabi, accusing Bennett of using his nonprofit media outlet, the Dallas Express, to unlawfully influence shareholders during a proxy fight. This case, as reported by D Magazine, raises serious questions about the intersection of media influence and corporate governance, particularly in how Bennett allegedly failed to disclose the media outlet's involvement in the proxy campaign to the U.S. Securities and Exchange Commission and the public.

The Proxy Fight and Financial Turmoil

The lawsuit alleges that the Dallas Express, financed and published by Bennett, targeted Aintabi and his company, Blackwells, with false and misleading claims to sway the outcome of the proxy fight in Bennett's favor. This strategy, if proven true, represents a stark manipulation of media power for personal corporate gain. The financial details disclosed in the lawsuit reveal Bennett's substantial "donations" to the Dallas Express, totaling over $3.4 million, starkly contrasting with its minimal advertising revenue. This financial imbalance casts a shadow over the media outlet's claimed impartiality and raises concerns about its role as a potential "mouthpiece" for Bennett's interests.

A Pattern of Financial Distress

The backdrop to this legal battle is Ashford Hospitality Trust's precarious financial situation. The company disclosed last summer that it had missed loan payments on 19 hotels, signaling deep financial distress. This revelation was followed by a lawsuit from lenders for seven of Ashford’s distressed hotels, including two in Dallas-Fort Worth, seeking a court-appointed receiver to recover the properties. These developments, as corroborated by multiple sources, paint a picture of a real estate investment trust struggling under the weight of nearly $150 million in defaulted loans and a broader strategy of divesting assets to manage its debt.

The Broader Implications

The saga of Monty Bennett and Ashford Hospitality Trust serves as a cautionary tale about the dangers of intertwining media influence with corporate governance. The alleged misuse of the Dallas Express to affect the outcome of a proxy fight, if true, underscores the need for transparency and accountability in corporate communications. Moreover, the financial struggles of Ashford Hospitality Trust highlight the vulnerabilities of the real estate investment sector to market fluctuations and strategic missteps. This case also reflects broader issues of corporate ethics and governance, especially concerning the use of media for personal gain.