Executive Inn Group Corporation

Executive Inn Group Corporation

March 04, 2005 14:49 ET

Executive Hotels and Resorts Announcement Regarding Possible Future Earnings Decrease as a Result of Material Events Effecting Le Soleil Hotel Project


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: EXECUTIVE INN GROUP CORPORATION

TSX VENTURE SYMBOL: EIG

MARCH 4, 2005 - 14:49 ET

Executive Hotels and Resorts Announcement Regarding
Possible Future Earnings Decrease as a Result of
Material Events Effecting Le Soleil Hotel Project

VANCOVUER, BRITISH COLUMBIA--(CCNMatthews - March 4, 2005) - Executive
Inn Group Corporation (TSX VENTURE:EIG)

Executive Hotels & Resorts is advising all shareholders that a recent
commencement of new litigation originating from several strata unit
owners in the Le Soleil Hotel project could materially impact future
earnings of the company and possibly result in a write down of certain
assets Executive has invested in relating to this hotel project.

Executive previously announced that it had invested to enter into a
joint venture to own a 50% interest in the operating business of the Le
Soleil Hotel ("Hotel") located in Vancouver, British Columbia. The joint
venture had purchased, in addition to other assets, the long term lease
interests in the common area property and parking structure at the Hotel
in order to operate a business hotel operation. It was anticipated at
the time of entering into the joint venture by Executive that all
litigation surrounding the project would be amicably resolved and
settled. However, within the fourth quarter of 2004, a new rash of
litigation has commenced and the prospects of a near term settlement do
not look positive.

In recent months new litigation has ensued which centers around a
challenge to the validity of the leases the joint venture has purchased.
Executive believes strongly in its position with regards to the validity
of the leases however there can be no certainty to the outcome of the
current litigation and the effect may result in a material decrease in
earnings and possible asset impairment charges. The defense of
Executive's position is expected to result in significant legal fees
being incurred by the joint venture and possibly by Executive directly
which may also have the effect of materially decreasing earnings in the
fourth quarter of 2004 and going forward.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Executive Inn Group Corporation
    Hanif Mawji
    Chief Financial Officer
    (604) 642 5252
    The TSX Venture Exchange has neither approved nor disapproved of the
    information contained herein.