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15 July 2011
3:13 p.m.
The Las Vegas Hard Rock Hotel has closed its Rare 120 steakhouse – and now it’s being sued over that decision.
The Dolce Group of Los Angeles, which says it developed and marketed the restaurant, filed suit Thursday in Clark County District Court charging the Hard Rock wrongfully terminated its contract to share revenue from the business – and then closed it on Monday.
A request for comment was placed with the Hard Rock. In its online restaurant listings, the property says, "Prepare for an exciting new steakhouse concept coming soon to Hard Rock Hotel & Casino."
Thursday’s lawsuit says the upscale restaurant opened on April 15, 2009, and for its first year it "was a huge success among locals and destination travelers, earning approximately $4.7 million in total food and beverage sales."
But mismanagement and cost-cutting ordered by the Hard Rock, which operated the restaurant, later caused sales to decline, the suit charges.
The lawsuit alleges Joseph Magliarditi, who ran the Hard Rock as president and CEO while it was controlled by international financial giant Credit Suisse AG, was responsible for many of these cuts including limiting the restaurant’s hours of operation, serving lower-quality meat, reducing the wine selection and decreasing the number of servers and cocktail waitresses, causing guests to complain about the service.
The suit alleges that over several months, the Hard Rock appointed five food and beverage managers to run Rare 120 and other bars and restaurants, "all of whom were incompetent, rarely visited the restaurant, had little interaction with employees and caused sales to drop dramatically."
Thursday’s suit was filed against the Hard Rock’s current owners including Brookfield Asset Management Inc.
Dolce’s contract to share revenue was canceled in June after the restaurant failed to hit a threshold of $4 million in sales during the preceding 12 months, the lawsuit says.
"Defendants wrongfully blamed the Dolce Group for failure to meet the $4 million threshold," the lawsuit says. "The new owners and operators ratified the prior mismanagement of Mr. Magliarditi and others from (the Hard Rock) and its affiliates in order to avoid continuing to pay" fees to Dolce.
The suit says Dolce Group also developed the Johnny Smalls restaurant at the Hard Rock on Paradise Road. That restaurant remains open.
Dolce Group is represented in the lawsuit by the Las Vegas law firm Bailey Kennedy.
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I do not blame the Dolce group for sueing the Hard Rock. The resort is going to waste. They did miss their $465,000 interest payment on 1.5 billion debt they are carrying a few months ago. The new management is totally out of touch with the mainstream. Their old steakhouse AJ'S was a better restuarant. Ago's their italian restaurant has a better filet than rare 120. The Hard Rocks newest sports book proprietor CANTOR really is out of touch with the average better. In this day and age of tight wallets and high unemployment . No one is allowed to place a sports bet at their counter inside the sportsbook, unless you are wagering $25 or higher. If not, Then they send you to a little window on the outskirts of their sportsbook. Talk about degrading! I was a frequent visitor their several times a week for years. Now i go elsewhere to spend my hard earned money. They need to take a few steps back and reevaluate their marketing tools. No wonder the place is deserted except on Fri & Sat nights.
Something does not make sense. Why wouldn't Dolce be at the restaurant on a more or less daily basis to oversee the operations? Why would they wait so long and then be surprised when the contract was cancelled since they did not meet the sales goal.
Isn't Magliarditi now running Palms...figures. Always a bad sign when you see these executives jumping from one ship to the next leaving a wake of garbage. Who would develop a plan for a restaurant, implement it and then let someone else come in and start ordering inferior quality meats, cutting staff, cutting hours, etc. to increase revenue? If I owned or operated a restaurant the last thing I'm doing is allowing someone to switch out my beef supplier.