Also listed as defendants in the suit are Northstar Hospitality LLC, Northstar Capital Investment Corp. and Northstar Partnership LP; MHG Associates LP; Ian Schrager Hotels LLC and Schrager individually; Edward Scheetz and David Hamamoto individually; and RSA Associates LP. (Hamamoto and Scheetz are listed in the complaint as managers of Schrager Hotels and Morgan LLC. Scheetz, of course, is president and CEO of Morgans).

At the heart of the suit are the Royalton and Paramount hotels in New York City. The suit claims that in 1998, Century sold the interest in the first and contributed its interest in the second "to entities controlled by Schrager Hotels. In connection with the contribution of interest in the Paramount Hotel, Century acquired a membership interest in Schrager Hotels."

The suit alleges that, while that membership interest did not give Century "any power to vote or approve any decision" affecting Schrager Hotels, "in return for receiving the benefit of extremely valuable hotel properties, the defendants agreed to distribute to Century defined amounts derived from any hotel property owned or managed by the company either at the time of the agreement or which was acquired any time thereafter." That would include proceeds from what the suit terms "capital events."

Among those capital events, the suit claims, is Morgans' February IPO for which "the consideration received, at least in part, was distributed to Morgans LLC members to the exclusion of Century."

In response, sources close to Morgans are claiming that the suit is being brought about by Philip Pilevsky, who previously sued the hotel company over management questions at the Shore Club Hotel in Miami. Spokespeople for Century have confirmed that "Century is one of Mr. Pilevsky's organizations."

As GlobeSt.com reported in January, "as majority owner of the Shore Club Hotel here, Philips South Beach LLC filed a court complaint charging Morgans Hotel Group; Ian Schrager, its founder; and others associated with Schrager's companies with engaging in a 'fraudulent scheme to improperly enrich themselves at the expense of the Shore Club.' Morgans has a 20-year agreement to manage the Shore Club and also owns and manages the Delano Hotel, which is two blocks away."

In a statement, Morgans officials said that, "We cannot comment on the content of a court filing before we have been served. However, the real plaintiff in interest is Mr. Pilevsky who is suing us at the Shore Club and also is suing a predecessor company about another hotel as well. We expect that the new lawsuit has as little merit as the others."

Interview requests with representatives of Century were denied.