WASHINGTON, DC-A dispute over the sale of three real estate assets by Host Hotels & Resorts that was brokered by Molinaro Koger in 2009 is getting set to move further up the legal food chain.  Host recently filed suit against its erstwhile broker alleging a conflict of interest in these sales--namely, according to the complaint, that a third party connected to Molinaro was the buyer in the transactions and those connections were not disclosed to Host. Host alleges it lost at least $15 million and probably more because of these less-than-arm’s length sales.

The sales include the trade of the Stamford Sheraton, the Washington Dulles Suites Marriott in Herndon and a subordinated debt sale. In a press release, however, Molinaro Koger says it was taken aback by the lawsuit filed by Host. The release also cites its intention to uncover the persons or company behind a series of crimes against the firm--crimes that include “pretexting the company's accounts to illegally obtain financial records from the firm's banks, breaking and entering Molinaro Koger's office and stealing files and sending false and malicious correspondence to MK's clients,” according to the release.

Host originally began investigating the transactions when it received an anonymous tip. “While serving as Host’s broker, Koger never disclosed to Host that he had a fundamental conflict of interest in each of the three transactions at issue,” the complaint reads. “The principals of the companies purchasing from or selling to Host were either a Molinaro Koger employee, a business partner of Robert Koger, or Robert Koger himself.”

Michele Roberts, a partner at Skadden Arps and Host’s outside counsel on the matter, tells GlobeSt.com that “Host exercised appropriate due diligence during the course of these transactions,” and that it was later that anonymous information regarding them was received. Representatives from Host declined to speak on the record to GlobeSt.com, citing the ongoing litigation. Molinaro also declined, for the same reason. Its counsel, Charles Kimmett of Wiltshire & Grannis, was unable to return a call in time for publication.

“This whole event seems like the plot of a John Grisham novel, where we are the victims,” said Robert Koger, president of Molinaro Koger, in the release. And about accusations contained in the complaint: “I defer to my counsel and will allow them each to be disproved through the litigation process Host has chosen to pursue.”

Molinaro Koger, meanwhile, has been pursuing its own eight-month old lawsuit to uncover the identities of people it believes to have stolen confidential information. In the release it issued, Molinaro Koger refers to a signed confession regarding some of the activities and a discovery ruling in its favor “in which the court has ordered a private investigation firm and its president to divulge who has financed these illegal acts and smear campaign.”