Las Vegas Sun NewsBaseball’s Jason Giambi, co-investors sue Las Vegas casino over club and restaurant deals
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Erik Kabik/Retna/www.erikkabikphoto.com
Jason Giambi at the Juliette Lewis performance at Wasted Space in the Hard Rock Hotel on Wednesday, Oct. 14, 2009.
Thursday
14 June 2012
1:49 p.m.
Colorado Rockies baseball player Jason Giambi and others say they struck out with $6.6 million in investments in clubs and restaurants at a Las Vegas casino, and they’re suing to recover profits they claim to be entitled to.
Two companies Giambi invested in filed suit Tuesday in Clark County District Court against the Hard Rock hotel-casino, its current and former owners and others.
The suits say that beginning in 2007, the Giambi companies invested in the Wasted Space Lounge, Rare 120 restaurant, the Johnny Smalls restaurant and Vanity nightclub at the Hard Rock, located a few blocks east of the Las Vegas Strip.
Wasted Space and Rare 120 have since closed, and the Hard Rock is tied up in a separate lawsuit with other investors over disputes involving Rare 120.
Rare 120 was replaced by the 35 Steaks+Martinis restaurant. Johnny Smalls and Vanity remain open.
Tuesday’s suit alleges racketeering and numerous instances of fraudulent accounting or management decisions that allegedly deprived the Giambi plaintiffs of a cut of an estimated $12 million in profits from the clubs and restaurants.
The defendants “acted in concert with the intention to defraud, convert and otherwise misappropriate (the Giambi companies) out of their investment money through, among other things, improper accounting practices, intentional mismanagement of venues and refusal to pay profits generated to (the Giambi companies),” the suit alleges.
The suit says the Hard Rock recently offered to pay the Giambi firms $683,000 to satisfy obligations related to the Vanity club.
The Giambi firms’ suit suggests this amount is woefully inadequate as Vanity alone is believed to have generated more than $10 million in profits since opening in 2009 and that the Giambi companies’ share of that should be $3 million to $5 million.
The suit also says that according to the Giambi investment agreement, the Hard Rock is barred from opening another nightclub in competition with Vanity.
Yet, according to Giambi’s attorneys, the Hard Rock may be planning to reopen the Body English nightclub.
The suit seeks an injunction barring Hard Rock from opening Body English or any other nightclub in competition with Vanity.
A request for comment was placed with the Hard Rock.
The plaintiffs in the suit are Mace Management Group LLC and Mandown LLC, companies organized by Giambi’s father, John Giambi, and a business partner to the Giambis, nightlife figure Cory McCormack.
They’re represented in the suit by the Las Vegas law firm Shumway Van & Hansen.
The defendants include current and former Hard Rock owners Brookfield Asset Management, Morgans Hotel Group and Credit Suisse bank.
Also sued were current casino operator Warner Gaming LLC, former Hard Rock nightclub and pool party operator and marketer Angel Management Group and Rare 120 investor Dolce Group Vegas LLC.
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Get out the hankies! A "celebrity" loses money in an investment. How novel! Pampered "super-stars" such as Giambi think everyone loves them and they can't fail in any endeavor they attempt. BS! I spent more than 20 years in the restaurant business and I can't count how many times I saw a "celebrities" investment in a restaurant go up in smoke. Eva Longoria was such a recent victim. They think all they need do is open a restaurant and folks will flock to it regardless of prices, service, quality and menu. As a matter of fact, the more exotic the menu, the more they think they will succeed. BS! There are some, like Jimmy Buffet, who do it the right way and succeed; but most are like Giambi with over-inflated egos and lots of cash they don't know how to invest. So, cry me a river, Jason, but take your losses and learn something from them!
For about a year now, I have been marketing celebrities through their managers, etc, to acquire certain Las Vegas CRE properties.
Now, they are either too dense to understand; or, too caught up in their own fame; or, they are listenning to really bad advice. I say this because investing in a leased space business opportunity concept at a casino is too high risk -- especially night clubs and restaurants.
Of course, IF they had taken that very same amount a money and acquired a long term net leased investment CRE, they most likely -- even if they acquired the property in 2008 or 2009 -- would still be receiving rental income from those investments today and not be a party to a law suit.
The problem is: Net Leased Investments are NOT flashy. They are not brag worthy. Telling a fellow Celeb that you own a long term net lease investment with a national credit tenant, such as: a fast food restaurant or stand-alone retail building, doesn't have the same flashy appeal of success that is worth bragging about.
The upside though, would be the less than public embarrassement of announcing you are suing your co-investors, etc. for helping you lose millions of dollars!
Very few Celebs will ever understand that CRE with fee simple ownership is one of the best long term investments. And, unfortunately, I have come to the conclusion that Celebs are either very dense!; or, they pay way too much attention to the very bad investment advice they are getting!
You would think that they would learn that when one Celeb loses money in a night club, that they too will lose money in any other night club concept. Then, Celebs are way too dense....
Well said,Dynamo. I would never 'absentee' invest in a nightclub. Too much cash. Relying on someone 3000 miles away to send me my cut,no way.
So KNOWING you got fleeced by your partners should be accepted and ok?