KNOXVILLE, Tenn. (WATE) - Employees at the downtown Marriott in Knoxville said they haven't been paid for the last two weeks of work. A company called Columbia Sussex owned the hotel before another company stepped in. Employees said they were supposed to get their last paycheck from Columbia Sussex on Friday, but nearly 100 people woke up to find the money not there.
Travis Ridley is one of those employees, frustrated by the ordeal. "People are scared. People are desperate. People have bills to pay," said Ridley.
Hotel ownership changed in September. I Square Management took over after Columbia Sussex owned the property for several years. When employees realized they weren't paid for their work, they were devastated.
"These were loyal employees. They always came to work on time and did their job. So we expected to get paid on time when we did our job," said Ridley.
Columbia Sussex is claiming the new owners, I Square Management failed its workers after taking over the loan.
In a statement to workers- Columbia Sussex said, "I Square Management refused -- and continues to refuse -- to release the funds, despite the net cash flow they received from the hotel of $1.7 million in their first month of ownership of the loan."
Ridley adds, "We're not sure who really owes us the money. I feel like if I was working for Columbia Sussex, it sounds like they owe us the money and it sounds like they're the ones who are holding our paychecks hostage."
According to the Department of Labor -- Columbia Sussex legally has 21 days to pay employees.
"They have been trying to take advantage of this law -- even though its unethical, is it apparently legal. But for those of us who have kids to feed, bills to pay, that law doesn't protect us," said Ridley.
For the employees who rely on this money, the decision is far from fair.
Ridley said, "We don't have a union, we don't have that sort of organization on our side. So we're kind of all reaching out for help from the public and the community."
"They're desperate, as they should be, and they want their story told," said Troy Keeping, the president of I Square Management, the new owner of the hotel.
I Square Management said the company had their attorney contact Columbia Sussex.
"It has been probably, in my 30 years of my professional career, been one of the most difficult days I've ever had to deal with because I know people live paycheck to paycheck," said Keeping.
WATE 6 On Your Side called Columbia Sussex and a woman who works for payroll sad they are following guidelines set by the Department of Labor. She said they have 21 days to pay employees from the last day they worked for them, which was September 5. She said they do plan to pay them.
A representative with the Tennessee Department of Labor confirmed Columbia Sussex has 21 days to pay employees, as long as no one from the prior company is involved with the new company that took ownership.
"We are here doing some salary advances, payroll advances to bridge that gap financially," said Keeping.
Columbia Sussex issued the following statement on Wednesday, shifting the blame to iSquare Management:
On Friday, September 15, 2017, the new owner of the Knoxville Marriott, iSquare Management, falsely accused Columbia Properties Knoxville, LLC of violating the law by not paying employees of the Knoxville Marriott their final paycheck on September 15, 2017.
Employees of the Knoxville Marriott deserve the truth about why they were not paid on September 15, and the truth about the character and motives of their new employer, iSquare Management, led by Arkansas executives Shash Goyal and Troy Keeping.
For more than a year, since the loan on the Knoxville Marriott matured in August 2016, all of the money from hotel operations has been paid directly to the lender, not Columbia Properties Knoxville, LLC, which has simply managed the hotel on behalf of the lender.
Since August 2016, by agreement between the lender and Columbia Properties Knoxville, LLC, the lender has periodically released enough of the cash from hotel operations to Columbia Properties Knoxville, LLC to pay the payroll for the Knoxville Marriott employees and to pay other hotel expenses.
Under that agreement, from August 2, 2017 when iSquare purchased the loan to September 5, 2017, when they bought the hotel, iSquare Management collected around $2.5 million in cash. Of that collected revenue, iSquare Management released approximately $800,000 to allow Columbia Properties Knoxville, LLC to pay operating expenses in August 2017, including payroll expenses prior to the final payroll.
Per the agreement and iSquare Management's adherence to it in August 2017, Columbia Properties Knoxville, LLC expected that iSquare Management would release money from the hotel's operations in time to make the final payroll on September 15, 2017, even though Tennessee law allows for an employee's final paycheck to be paid within 21 days of the end of employment.
But that is not what happened. Inexplicably, iSquare Management refused – and continues to refuse – to release the funds, despite the net cash flow they received from the hotel of $1.7 million in their first month of ownership of the loan.
To make matters worse, instead of explaining the whole truth to its new employees, instead of revealing to the media why these employees were not receiving a paycheck on September 15, 2017, iSquare Management pinned its failure to fund the payroll on Columbia Properties Knoxville, LLC.
Now, iSquare Management has slandered Columbia Properties Knoxville, LLC in the media and suggested that its employees should sue Columbia Properties Knoxville, LLC, even though no legal violation has occurred.
Columbia Properties Knoxville, LLC appreciates the dedication and years of service of its Knoxville Marriott employees, and it will pursue the release of the funds from iSquare Management.