Regent’s locals marketing plan criticized in lawsuit

David Strow

Wednesday, Jan. 31, 2001 | 11:10 a.m.

Jim Fonseca, former chief operating officer of the Regent Las Vegas, filed a shareholder's lawsuit against the Regent's parent company Tuesday, claiming the company's shift from upscale golf resort to locals casino speeded the resort's decline into bankruptcy.

The Clark County District Court lawsuit accuses Swiss Casinos of America Inc. and Chairman Hans Jecklin of breach of duty to shareholders for "grossly mismanaging Swiss Casinos and the Regent Las Vegas," for opening the Regent to the public before it was fully completed, and for hiring individuals to run the property "that had no experience in the resort gaming industry."

Fonseca claims to hold about 4 percent of Swiss Casinos' stock.

The Regent's holding company, Resort at Summerlin L.P., filed for Chapter 11 bankruptcy in November.

The Regent denied the charges and blamed Fonseca for some of the problems.

The lawsuit ripped Swiss Casinos and the Regent's current chief executive, Darrell Luery, for "institut(ing) a marketing plan that was ill conceived, poorly implemented and had disastrous effects for the property."

Luery took over the Regent in November 1999, just two months after Fonseca resigned. Since that time, Luery has attempted to reposition the Regent from an upscale golf resort and casino to a locals-oriented property.

However, under this new direction, the Regent failed to equal the gaming revenues reached in October 1999, the last month before Luery's arrival, Fonseca claimed.

The lawsuit also accused Luery of making false statements to the press regarding the Regent's financial performance -- comments shareholders had to rely on, Fonseca said, because the property had not filed financial reports with the Securities and Exchange Commission since November 1999.

Despite Luery's statements in the press that the Regent's financial performance was improving, Fonseca claimed that the Regent "recorded substantial losses at the operating level" each month from November 1999 to September 2000.