An organisation rarely embarks on a venture without there being a perceived advantage; conversely, it would be ill-advised to embark on any venture without knowing exactly what the potential risks and liabilities were likely to be.  Nearly all large projects have a fair share of unexpected issues and the importance of taking professional legal advice at every stage cannot be overstated.  There have been a number of attempts by high profile organisations to gain an advantage which transpires to be a liability when the full facts are known, as the new owners of Patisserie Valerie are finding out to their cost.

Giambrone has extensive experience with managing cross-border transactions together with the incongruent risks that may be found.  The firm was approached to assist a client based in the UAE, who has a growing portfolio of hotels.  Giorgio Bianco, the resident partner in Sardinia, was selected to head Giambrone's corporate and commercial team for the purposes of advising our client, who had recently obtained a hotel in Sardinia, and facilitating the legal procedures, contracts, classification, as well as assisting with obtaining the necessary licences required to operate as a hotel.

The previous owner of the hotel acquired by our clients had subjected the property to a number of breaches regarding the planning law, which had passed unnoticed by the authorities; clearly, our client did not wish this situation to continue unrectified.  The lawyers had flagged up the problems.  Giambrone's corporate team undertook a meticulous programme of due diligence to establish the flaws and breaches that were present and painstakingly and systematically worked their way through each issue in order to remedy each contravention and create a sound environment for our clients.  This was no easy task as many of the contraventions required an innovative solution.

Our client wished to operate as a four-star hotel which meant the existing classification had to be modified to enable the change of classification for the four-star status to be achieved.  The process of reclassification can be commenced once all the adjustments and alterations have been made to bring the hotel up to a level commensurate with the expectations for a four-star rating.  However an application must be precise and accurately reflect the designated requirements and preconceptions for luxury hotel accommodation or it will be summarily rejected and the whole process will have to start again, wasting valuable time for the client.   Giambrone clearly outlined the strategies required changes that must be made to satisfy the authorities.

The employment contracts for staff at such an establishment as a four-star hotel are critical and must be most carefully drafted to include non-disclosure and confidentiality agreements to prevent the privacy of high profile guests being compromised by staff.  Similarly, privacy laws must be assiduously considered with respect to CCTV systems which are in place for security purposes to ensure that the balance between the safety of patrons and a potential intrusion of privacy is legally off-set.  The outsourcing agreements pose another area where the high profile guests' privacy must be considered and the lawyers at Giambrone are mindful that judicious drafting of all such agreements is essential for the prevention of privacy breaches.

The desired four-star rating was achieved on this occasion.  Giambrone sign-posted the route to five-star approval, again listing all the changes that must be undertaken which will eventually lead to the change of status should the client wish to upgrade at any time.  The newly refurbished and reclassified hotel opened for business for their wealthy patrons safe in the knowledge that the legal environment surrounding their new project was completely sound.  The lawyers in the Giambrone corporate team were able to provide complete peace of mind; however, as a failsafe, the team remained in place for a period of time to deal with any residual matters arising from the project.

The warning to all purchasers is that without solid high-quality legal advice from the onset, they may find that during the course of the project more and more issues are thrown up and the whole venture proves to be unsound to such a degree that it has to be terminated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.