Newton Independent
The owner of the Microtel Inn & Suites in Colfax being sued for an alleged breach of a sale agreement has filed a counterclaim stating fraudulent misrepresentations made by the potential buyer lead them to back out of the sale earlier this year.
BJM Hotels, Inc., filed suit against Shekar Properties, LLC, owners of the Colfax motel, claiming the corporation breached a written contract entered into in January when it failed to complete the $640,000 sale as agreed to despite receiving $25,000 in earnest money as provided for in the contract.
BJM Hotels was incorporated as a Colfax company in January of this year by Boney M. Patel. Shekar Properties is a Johnston corporation whose president is Chandra Shekar.
The counterclaim states that a representative of BJM Hotels told Shekar that the company could discontinue its franchise agreement with Microtel Inns "without consequences, and without the obligation to pay the liquidated damages set forth in the agreement." The counterclaim contends BJM representatives stated the company "had previously breached similar contractsw with impunity and without adverse consequences."
After the purchase and sale agrement was executed. Shekar, who admits to having little hotel franchise experience and relied on the representations made by the potential buyer, found that he would be required to pay at least $117,000 in liquidated damages to Microtel for breaking the franchise agreement.
"Counterclaimant justifiably relied on the representations of BJM Hotels, Inc., when it entered into the Purchase and Sale Agreement," the counterclaim states. "The representations made by Counterclaimant defendant were material, and absent these representations, counterclaimant would not have entered into the Purchase and Sale Agreement."
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