SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

SCHEETZ W EDWARD

(Last)

(First)

(Middle)

C/O MORGANS HOTEL GROUP CO.

475 TENTH AVENUE

(Street)

NEW YORK

10018

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
Morgans Hotel Group Co. [ MHGC ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	President & CEO

3. Date of Earliest Transaction (Month/Day/Year)
09/07/2007

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock, par value $0.01 per share	09/07/2007		J⁽¹⁾		871,815⁽²⁾	A	⁽¹⁾	871,815⁽²⁾	I	By NCIC MHG Subsidiary LLC⁽¹⁾
Common Stock, par value $0.01 per share	09/07/2007		J⁽¹⁾		915,207⁽²⁾	A	⁽¹⁾	915,207⁽²⁾	I	By NorthStar Partnership, L.P.⁽¹⁾
Common Stock, par value $0.01 per share								113,358	D
Common Stock, par value $0.01 per share								2,479	I	By minor child of reporting person⁽³⁾
Common Stock, par value $0.01 per share								2,483	I	By minor child of reporting person⁽⁴⁾
Common Stock, par value $0.01 per share								736,342	I	By WES Holdings LLC⁽⁵⁾
Common Stock, par value $0.01 per share								10,000	I	By spouse of reporting person

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Membership Units⁽⁶⁾	⁽⁶⁾	09/07/2007		J⁽⁷⁾		1,000,000⁽²⁾		⁽⁶⁾	⁽⁶⁾	Common Stock	1,000,000⁽²⁾	⁽⁷⁾	1,000,000⁽²⁾	I	By Residual Hotel Interest LLC⁽⁷⁾
LTIP Units⁽⁸⁾	⁽⁸⁾							⁽⁹⁾	⁽⁹⁾	Common Stock	423,000		423,000	D

Explanation of Responses:

1. On July 20, 2007, NorthStar Capital Investment Corp. ("NCIC") and NorthStar Partnership, L.P. ("NorthStar LP") entered into an Agreement and Plan of Merger with Mr. W. Edward Scheetz and Mr. David T. Hamamoto contemplating the merger of an entity owned and controlled by Messrs. Scheetz and Hamamoto into NCIC and the merger of an entity owned and controlled by Messrs. Scheetz and Hamamoto into NorthStar LP (the "Transaction"). The aggregate consideration paid to the shareholders of NCIC and the unitholders of NorthStart LP in connection with the Transaction was $207,956,385. The Transaction closed on September 7, 2007. As a result of the closing of the Transaction, Mr. Scheetz has a beneficial ownership interest in certain shares of common stock, par value $0.01 per share ("Common Stock"), of Morgans Hotel Group Co. (the "Company"), through NCIC MHG Subsidiary LLC, a wholly-owned subsidiary of NCIC, and NorthStar LP.

2. The reporting person disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose.

3. 1,200 of the shares of Common Stock of the Company reported herein were purchased by a trust for the benefit of the minor daughter of Mr. Scheetz. Mr. Scheetz transferred the entire purchase price of such shares of Common Stock to the trust for the trust's purchase of such shares of Common Stock. Such shares are held directly by the trust for the benefit of the minor daughter of Mr. Scheetz. The remainder of the shares of Common Stock reported herein are held directly in the name of the minor daughter of Mr. Scheetz.

4. 1,200 of the shares of Common Stock of the Company reported herein were purchased by a trust for the benefit of the minor son of Mr. Scheetz. Mr. Scheetz transferred the entire purchase price of such shares of Common Stock to the trust for the trust's purchase of such shares of Common Stock. Such shares are held directly by the trust for the benefit of the minor son of Mr. Scheetz. The remainder of the shares of Common Stock reported herein are held directly in the name of the minor son of Mr. Scheetz.

5. The 736,342 shares of Common Stock reported herein as indirectly owned are beneficially owned directly by WES Holdings LLC for the benefit of Mr. Scheetz. By virtue of his position as the managing member of WES Holdings LLC, Mr. Scheetz is deemed to beneficially own such 736,342 shares of Common Stock.

6. Represents units of membership interest in Morgans Group LLC, the operating company and a subsidiary of the Company (the "Membership Units"). The Company is the sole managing member (the "Managing Member") of Morgans Group LLC. Each of these Membership Units is redeemable at the election of the holder for: (1) one (1) share of Common Stock, or (2) at the option of the Company in its capacity as Managing Member, cash equal to the then fair market value of one (1) share of Common Stock, in each case beginning February 17, 2007. The right of a holder to redeem these Membership Units does not have an expiration date.

7. The 1,000,000 Membership Units reported herein may be deemed to be beneficially owned by NCIC through its indirect subsidiary, Residual Hotel Interest LLC. The reporting person indirectly owns certain of such Membership Units by virtue of his ownership interest in NCIC as a result of the closing of the Transaction. The aggregate consideration paid to the shareholders of NCIC and the unitholders of NorthStart LP in connection with the Transaction was $207,956,385.

8. Represents Membership Units in Morgans Group LLC, which are structured as profits interests ("LTIP Units"). Conditioned upon minimum allocations to the capital accounts of the LTIP Units for federal income tax purposes, each LTIP Unit may be converted, at the election of the holder, into one (1) Membership Unit. Each of these Membership Units is redeemable at the election of the holder for: (1) one (1) share of Common Stock, or (2) at the option of the Company, cash equal to the then fair market value of one (1) share of Common Stock.

9. 325,000 of the LTIP Units vest one-third each year on each of the three one-year anniversaries of their grant date and 98,000 of the LTIP Units vest one-third on the first anniversary of the grant date and the remainder vest in twenty-four equal installments at the end of each month following the first anniversary of the grant date. The right of a holder to convert LTIP Units into Membership Units and to have the Membership Units redeemed does not have an expiration date. The LTIP Units will be subject to the terms and conditions of the Company's 2007 Omnibus Incentive Plan.

Remarks:

	/s/ Richard Szymanski, by power of attorney	09/11/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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