Public Safety

Former Clarion Hotel owner ordered to pay $2 million to new owner

The former owner had been accused of not paying employees and abandoning the hotel

Ramada Cedar Rapids, formerly as a Clarion Hotel under former ownership, is shown at  525 33rd Ave SW, Cedar Rapids on July 6, 2018. (Matthew Patane, The Gazette)
Ramada Cedar Rapids, formerly as a Clarion Hotel under former ownership, is shown at 525 33rd Ave SW, Cedar Rapids on July 6, 2018. (Matthew Patane, The Gazette)

CEDAR RAPIDS — The former owner of a Cedar Rapids hotel who was accused of not paying employees has been ordered to pay the property’s new owners more than $2 million.

An Iowa District Court judge has ordered Hassan Imtiaz Hussain and his father, Imtiaz Hussain, to pay the money to Ashok Kalra and his family, The Kalras have taken over ownership of the hotel formerly known as the Clarion Hotel and Convention Center, 525 33rd Ave. SW, in Cedar Rapids. It is now operating under the Ramada brand name.

In the June 25 judgment, District Court Judge Fae Hoover Grinde declared the Kalras as the full owner of HRDMM Hospitality Services, which acquired the Clarion in March 2017. Grinde also ordered the Hussains to pay the Kalras $2.18 million to cover payments the Kalras made to fund the hotel’s operations and money they provided to the Hussains while the latter was still running the hotel.

The judgment is the result of a lawsuit the Kalras filed in March against Hussain, his father and his brother. In it, the Kalras said Hussain had not repaid money they lent him. forged checks using Ashok Kalra’s signature and left the hotel, taking computers and financial records with him.

The Kalras sought a default judgment against Hussain and his father, who did not provide their own response in court, the judge’s order reads. Hassan Hussain did appear in court, but without an attorney, when the case came before a judge.

Grinde found that Hussain and his father “misappropriated substantial funds from the hotel, failed to pay employees, payroll taxes and vendors” resulting in the Kalras needing to provide more cash for the hotel to keep running.

The ruling comes about eight months after employees at the Clarion complained Hassan Hussain had stopped paying them on time or with bad checks. At the time, Hussain had denied those claims, but the employee complaints prompted a federal wage investigation and the hotel lost its ability to use the Clarion name. The U.S. Department of Labor resolved its investigations earlier this year, which the department said resulted in $129,073 in recovered back wages.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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