Ocean Avenue LLC v. County of L.A.

FACTS

Since 1999, the Fairmont Miramar Hotel (Hotel) has been owned by Ocean Avenue, an entity formed by Hotel Equity Fund VII, L.P. (Equity Fund). In March 2006, the Hotel was put up for sale. On July 7, 2006, Ocean Avenue entered into a contract (Initial Contract) to sell the Hotel to 101 Wilshire, LLC.2 On September 6, 2006, the parties signed a document in which they terminated the Initial Contract and related

1 All further statutory references are to the Revenue and Taxation Code unless otherwise indicated. 2 The County maintains that 101 Wilshire LLC was formed by MSD Capital LP (MSD Capital).

2 escrow. The same day, Equity Fund sold 100 percent of its membership/ownership interest in Ocean Avenue as follows: The Susan Lieberman Dell Separate Property Trust acquired a 49 percent interest; MSD Portfolio, L.P.—Investments (MSD Portfolio) acquired a 42.5 percent interest; and Miramar Hotel Investor, LLC (Hotel Investor LLC) acquired a 8.5 percent interest. Michael Dell directly owns 99 percent of MSD Portfolio. The other 1 percent is owned by MSD Capital. Because Michael Dell owns 99 percent of MSD Capital, he directly or indirectly owns 99.9 percent of MSD Portfolio.3 There…