When businessman John B. Coleman came to Washington in 1977 and purchased the hotel that became the Ritz Carlton, it was clear he was fond of the spotlight.
Soon after Coleman bought what was then the Fairfax Hotel at 2100 Massachusetts Ave. and renovated it, he began giving lavish parties and inviting everyone from Cabinet members to socialites to his luxury hotel.
His name is frequently in the news with events such as an annual brunch he gives for the Kennedy Center honorees. He often hosts political or charitable events at the hotel's Jockey Club restaurant.
"He's a marketing genius," said one former Ritz Carlton executive, echoing the sentiments of others who have worked for, or with, Coleman.
Coleman, a 50-year-old former Bostonian, is less known for his frequent appearances in a different kind of spotlight -- as a defendant in courts in Washington, Chicago and New York. He has left a trail of lawsuits brought by unhappy business managers who have alleged that he failed to pay debts totaling more than $6 million. Many of the suits have been settled out of court.
In New York and Washington, more than 60 liens -- only some resulting in lawsuits -- have been filed. Liens are claims on property as security for debts and are usually filed in local deed offices.
In Marke Painting and Decorating v. John B. Coleman, a case in the New York Supreme Court, more than 40 businesses filed jointly seeking more than $2 million they said Coleman owed them. When Coleman sought to postpone the trial because his attorneys had withdrawn from the case, the businesses cited examples of what they alleged was Coleman's history of a "shocking and flagrant pattern" of not paying his "just debts."
"Coleman's standard operating procedure is to default on payments due to contractors, consultants, lawyers and other professionals, force his creditors to sue him, use a variety of tactics to delay trial -- including changing his counsel during the litigation -- and then seek to settle claims for a fraction of their value on the eve of, or during, trial," the plaintiffs said in court documents.
In the Marke case, Coleman denied he owed the plantiffs what they claimed and asserted counterclaims. One counterclaim, for example, alleged that a subcontractor had caused damage that exceeded his claims. All but two of the plaintiff's claims were settled out of court.
In Washington, Coleman is the defendant in six civil court cases involving claims of nearly $3 million. In each of the suits, a business -- from a construction company to a silverware supplier to an executive search firm -- alleges that Coleman owes money that hasn't been paid.
In a telephone interview, Coleman declined to discuss the suits. "I don't want to get into this sort of conversation," Coleman said, referring questions to a lawyer. He did say, "Most of the suits are with one general contractor. We haven't had suits in the past. Every business has lawsuits all the time." Subsequently, Coleman did not return repeated phone calls.
Law firms, advertising agencies and public relations firms that have worked for Coleman are among those who have gone to the courts to settle disputes with Coleman over allegedly unpaid bills.
Coleman has dealt with many service firms; he frequently changes them. Among his hotel staff, top managers often leave after a relatively short time.
Coleman is reported to be a multimillionaire. In addition to owning the Ritz Carlton hotels in Washington and New York City, he operates the Whitehall and Tremont hotels in Chicago and has other business investments. He sponsors the Gold Cup races in Virginia and donates hotel rooms to celebrities for charity events, gives parties costing tens of thousands of dollars and has lunch at the White House.
The lawsuits present a contrast to Coleman's life style, which includes driving a Ferrari, chartering planes, using limousines routinely and owning a home in the Embassy Row section of Washington, where he lives with his fourth wife and their small son.
In New York, Coleman's most recent legal battles involved debts from the renovation of the Navarro Hotel on Central Park South, which he bought in 1980 and later renamed the Ritz Carlton.
In documents filed in the Marke Painting case, plaintiffs listed examples of an alleged "pattern" of Coleman's eluding his debts:
More than 12 contractors sued Coleman in Chicago in 1977 in connection with the renovation of the Tremont hotel. "We have been reliably advised by one of the prominent Chicago law firms involved that Coleman changed counsel four times during the course of the litigation. Two of the firms resigned because Coleman had not paid them."
In a partnership suit involving the Tremont hotel, there were allegations that Coleman used construction funds for the Tremont for the renovation of his own townhouse.
Coleman left unpaid balances in Chicago at a number of accounting, advertising and public relations firms totaling more than $328,000.
Also in Chicago, construction managers, plumbing contractors and construction consultants have sued Coleman for unpaid bills of more than $300,000 on various construction projects.
The plaintiffs in the Marke suit said in court papers that they "waited years to be paid while Coleman has had the benefit of a profitable, first-class hotel and restaurant that the lienors built for him."
A construction company, Schal Associates, was the largest claimant, going to trial and winning a judgment of nearly three-quarters of a million dollars in January.
That decision will be appealed, said Joel A. Kozol, Coleman's attorney in the case. Kozol would not comment further on the case.
Kozol was not Coleman's first representative in the case. The New York firm of Shea & Gould represented Coleman at the beginning of the litigation. However, about midway through the case Shea & Gould asked the court to be relieved of its duties.
"To date, Shea & Gould has not received any compensation" for professional services, attorneys for the firm stated in court filings. The firm now has an outstanding claim of about $170,000 against Coleman, according to the documents.
In Washington, numerous liens have been filed against Coleman's property by business owners who allege their bills have not been paid. In one of the liens, McDevitt & Street, an Atlanta contractor responsible for the construction that added 100 rooms to the Washington Ritz Carlton last year, and a number of subcontractors, allege that Coleman owes them $2.5 million.
"It's my absolute policy never to talk to members of the press," said Alan Galbraith, Coleman's attorney in a suit filed in U.S. District Court against McDevitt in an effort to remove the lien. The case is pending.
Another suit involves a Washington office supply company.
"He doesn't say he doesn't owe the money," said Clark R. Silcox, an attorney for the M. S. Ginn Co., which installed carpeting in Coleman's hotel and in May filed suit against him for more than $46,000 in allegedly unpaid bills. "He got them to go back to work after paying $20,000 of a $60,000 bill. Now they're sorry they went back because he's not paid what's due and already owes them another $9,000."
Angelo Bonita, a Bethesda florist, filed suit in April against Coleman for more than $68,000 in unpaid bills. He said he provided $6,000 a month in floral services to the hotel and wasn't paid for more than a year. This was during a time when he said he had to borrow money to keep his business alive.
"When you read about the superstars, the political meetings in the hotel . . . often all you know about this man is very positive," Bonita said. There's an "interesting contrast that's never known until those of us are stung by him."
Bonita's suit was settled out of court this month for about $60,000, Bonita said.
"The case has been settled," said Nancy Preiss, who represented Coleman in the action. She declined to comment further on the case.
In Chicago this month, a Cook County Circuit Court judge ruled after a four-year legal battle that attorneys Kenneth Pigott and Thomas Reynolds were partners with Coleman in the Whitehall Hotel, which Coleman sold to a real estate syndicate in 1984 for $42 million, according to court documents. He still operates the hotel.
The judge awarded Pigott and Reynolds nearly $1 million each and ruled that each had a 2.5 percent interest in the hotel. Coleman intends to appeal the ruling, said Tom Foran, his attorney in the case. Coleman contends that the partnership's equity in the hotel was between $3 million and $5 million, making the value of the partnership much less than the $1 million awarded, Foran said.
While Coleman keeps numerous attorneys busy on his behalf, he also manages to run four of the best known luxury hotels in the nation. And people who have worked for him are unanimous about one thing: When he renovates an old hotel, everything he does is first class.
After Coleman bought the old Fairfax for a reported price of between $5 million and $7 million, he is said to have spent twice that for the meticulous renovation. The hotel's 160 rooms were furnished with Federal period reproductions and decorated with original paintings. Oriental rugs and imported wood paneling were used throughout the hotel.
"The gentleman has excellent taste in terms of the quality of things," said one former employe.
When the construction of 100 extra rooms was added to the Washington Ritz Carlton beginning in 1984, Coleman also decided to refurnish and renovate all the existing guest rooms and suites. S. B. Construction Co. of Silver Spring did much of the bathroom remodeling in the existing hotel. According to the company's suit filed June 6, Coleman owes the company more than $155,000 for the work. Coleman's attorneys have not filed a response to the suit.
The New York interior-design firm of Parish-Hadley Associates was hired to decorate the new rooms and suites. "Sister" Parish had helped Jacqueline Kennedy refurbish the White House in the 1960s.
While the hotel was being expanded and refurbished, it was bringing in very little money, according to executives who worked there at the time. Most of the rooms were closed during the summer and fall, with only the Jockey Club and 25 to 35 rooms open during the construction, the employes said.
Asked how his Washington hotel is doing, Coleman said in the telephone interview: "We seem to be doing well."
In general, experts in the hotel industry point out that this is not a good time for luxury hotels, particularly in Washington, where luxury hotels make up a large percentage of the new hotels. In 1983, there were about 1,300 luxury rooms in the Washington area, compared with about 2,250 today, according to Westly Ayre, of Laventhol & Horwath, a consulting firm for the lodging industry. That's about a 73 percent increase, and the luxury market is expected to continue to grow.
Apart from his controversial financial dealings, Coleman has generated attention within the hotel industry because many of his key employes have left, some after personal differences with Coleman.
"He's a very difficult man to work for," said a former employe who asked not to be identified. "He hires thoroughbred people and then doesn't let them do things they do best."
But what some call difficult, others call brilliant. "I would see him operate and be in slack-jawed awe," said one former employe.
The Washington Ritz Carlton has had four general managers in the past two years, according to several sources, a turnover rate much higher than most hotels. Coleman said he had "no opinion" on whether the turnover rate in his hotel is high.
Coleman has had similar turnover with his outside professionals, such as lawyers and public relations firms.
In Washington, Coleman's public relations representatives have included Gray & Co.; Michael Deaver Associates; Effi Barry at JAM Inc.; Campbell, Peachey & Associates; Campbell-Dalton Marketing; and Rogers & Cowan Inc.
"We did some marketing for them. They owe us money," said Connie Dalton, of Campbell-Dalton.
"We'd be pleased to work with him in the future," said Frank Mankiewicz , a spokesman for Gray & Co.
"As a client, he's extremely dynamic, demanding, . . . but then, I don't have a client who's not demanding," said Carolyn Peachey of Campbell, Peachey, who said her firm had been paid. "He had teriffic ideas and expected expert and perfect service."
One of the advertising firms that once worked for Coleman is Soskin Thompson, which was a division of J. Walter Thompson in 1984, when the firm sued Coleman and won a judgment of more than $200,000. That judgment was affirmed on appeal last summer, according to Louis A. Mangone, the attorney who represented Soskin Thompson.
Charles Read, an attorney with O'Melveny & Myers, the firm that handled the damages portion of the case for Coleman, confirmed the judgment, but had no comment on the case.
"It was very difficult to pin the man down," said David Soskin, who was president of Soskin Thompson and is now a senior vice president of SFN Cos. Inc. "We did work directly with Mr. Coleman and, having been president of an advertising agency, I can say it was the single most unpleasant, unprofessional experience I've ever had with any human being."
Professionals who have worked for Coleman say his own sense of the way things should be done often becomes an issue in his relationships with employes and with outside firms. He has a "zeal for perfection," said Gary Sain, until about a month ago the corporate vice president for marketing in Coleman's organization. "When these people don't perform up to what he expects, it can be frustrating for both. . . . That's true of any company with a strong individual."
But florist Bonita, who works for other D.C. hotels -- including the Vista International Hotel, Four Seasons Hotel Ltd. and The Westin Hotel -- said the situation in Coleman's hotel is different from the others.
"It was definitely the way Mr. Coleman runs his organization versus the way other hotels are run," Bonita said. "In virtually every other hotel in Washington, there's a respect between the hotel and the vendors. . . . No one warns about the quicksand that is there in the way he deals with people."
Special correspondents John Kennedy in New York and Bob Knight in Chicago contributed to this report.