Morgans Hotel Group Co. Chairman Jason Kalisman received a letter from shareholder Yucaipa Cos. and billionaire Ron Burkle. Burkle said the board should sell the boutique-lodging company. Yucaipa has over USD200 million of the hotelier's debt and warrants for 30% of the company's stock.

The call for an exit sale came after Michael Gross resigned as Morgans Chief Executive Officer. The announcement of a CEO-less Morgans was done yesterday. Gross' departure was a result of the hotelier's largest shareholder, OTK Associates LLC. OTK led the ousting of the board in June. OTK was founded by Kalisman and owned a 14% stake on the New York-based hotelier. Kalisman is also acting CEO of Morgans.

According to compiled data from Bloomberg, Morgans has been losing money every quarter since 2007. The hotelier operates properties like the Los Angeles-based Mondrian and Miami's Delano.

"I believe you are in breach of your obligation to provide us with observation rights," Burkle added in the letter dated August 30 and filed with the US Securities and Exchange Commission. Burkle also said, "The entire incident with Michael Gross is a great example of not keeping the board informed or board observers informed of what's going on." Burkle's Yucaipa demanded that it has the right to know about the discussions of the hotelier's "refinancings, new CEOs, terminated CEOs and like matters."