Baseball’s Jason Giambi, co-investors sue Las Vegas casino over club and restaurant deals
14 June 2012
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.
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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