As the legal fight over the health of 93-year-old Springfield hotel magnate John Q. Hammons lingers, the company that still bears his name faces two lawsuits alleging improper business practices by Hammons’ hand-picked successor.
In New York, a company formed from the former Barclays Capital Real Estate Inc. has sued a Hammons limited liability corporation over an $80 million construction loan secured to build a hotel and convention center in Rogers, Ark.
The suit by Rogers Funding LLC in New York state court accuses Hammons CEO Jacqueline Dowdy of submitting a “grossly inflated” calculations of Hammons’ net worth as $1.3 billion — a miscalculation the lender says exaggerates his actual worth by $1 billion. The loan agreement requires the recipient to have at least $400 million in assets.
And in Delaware, a holding company that owns more than half of the 78 hotels managed by Hammons has sued Dowdy and the John Q. Hammons Hotel Management Co. for allegedly breaking a contract by taking over the company without its permission.
That suit, filed in late July by various corporate entities that control Atrium Hotels, suggests Dowdy “usurped the role of CEO,” wrongly diverted Hammons’ $200,000 salary to herself and approved more than $1 million in unwarranted corporate bonus payments. Jonathan Eilian, a former managing director of Starwood Capital Group, is a principal in both companies suing the Hammons hotel group.
Dowdy rose to her current position over several decades as John Q. Hammons’ confidant, starting as an administrative assistant and later his personal bookkeeper. She has consistently declined interview requests since the legal disputes emerged.
The company issued a written statement calling the first lawsuit “baseless and without merit” while noting it continues to make regular loan payments. John Q. Hammons Hotels & Resorts responded with a countersuit in June “in an effort to vindicate the company and to firmly establish that the company is not in default.”
A second statement said the company has not violated its contract with Atrium and “ has effectively managed the hotels in its portfolio” under Dowdy’s leadership.
In March 2011, a group of eight close friends of Hammons filed suit over concerns about his declining health, worried that he had been purposely isolated by Dowdy. The petitioners include the local Chamber of Commerce president, a former state senator and two broadcast company executives.
A Greene County judge quickly sealed the probate court case from public view, but online court records show it remains active. A court-appointed attorney for Hammons, who lives in a Springfield nursing home, confirmed the case is still in dispute but otherwise declined comment.
Bill Rowe, a former Missouri State University athletic director who is not among the eight court petitioners, said Friday that he and other friends of Hammons have been allowed regular, supervised visits since the summer of 2011 but remains in the dark about the broader legal battle. Those visitors were also required to sign a “gag order” forbidding detailed comments to the press, Rowe added.
“We have been able to go see him,” he said. “That was our main concern.”
The hotel developer’s wife of more than 60 years, who is 95, suffers from Alzheimer’s disease and lives in the same long-term care facility where her husband stays, Rowe said. The couple had no children, and John Hammons’ will is in a closely held private trust.
The Hammons name can be seen on buildings throughout Springfield, from the Hammons Tower downtown office building to JQH Arena at Missouri State University and Hammons Field, home to the local minor-league baseball team.