The same dossier cast doubt on the source of the Lutnick-Khashoggi WhatsApp messages, but Vanity Fair was able to independently verify the London meeting between the two. The exchanges confirmed what some residents had suspected: that Lutnick played a role in the Saudi’s takeover plan.
All of which fed many shareholders’ sense that they were being kept in the dark. “You mentioned Khashoggi LLC is the buyer, but who is putting up the money behind the Khashoggi hedge fund?” one shareholder asked during the July presentation in the Pierre’s chandeliered Cotillion Ballroom.
“There is no hedge fund. This is Mr. Khashoggi. This will be funded in all cash, and it is only him.”
“We’re not going to leave you out there with an unfunded buyer,” added Patrick Dowd, the lawyer at Fried Frank, the firm that had been retained to work on the Pierre deal. In fact, Khashoggi and his people were taking that “cash” and “moving it into Citibank,” Dowd continued. “Before you vote,” the transfer would be “fully verified.”
But neither Dowd’s words, nor the Dorchester Collection video detailing their engineers’ investigations about the dire state of the building, nor the red teddy bears given out to residents at the July function appeared to satisfy the restive shareholders.
In the proxy statement sent out a month later, departing residents were promised five free nights in a suite at one of Dorchester’s other high-end hotels, plus a set of perks. But “priority access to spa treatments,” free breakfast, and “preferred consideration for private dining” seemed unlikely to move the needle with a crowd accustomed to more elaborate pampering. Nor did the opportunity to be first in line to buy a customized apartment at the Pierre after all the years of remodeling were over.
Khashoggi tried emailing shareholders directly the following week. “I understand how personal this is,” he wrote. “Growing up, my family stayed at the hotel whenever we visited New York. Some of my clearest early memories are of the lobby, the view of the park, and the unmistakable sense that you had stepped into somewhere enduring.”
He added, “I sincerely hope that you will welcome me and my family into the Pierre family.”
That still might happen. But at least one longtime Pierre shareholder is hedging his bets. Eisner, who owns a pair of apartments at the Pierre and has openly fought with current management, just bought a place, just one block south on Fifth Avenue.
