Two builders fighting Regent settlement with contractor

Grace Leong

Friday, June 29, 2001 | 10:56 a.m.

Two subcontractors in a legal dispute with the bankrupt Regent hotel-casino in Las Vegas are opposing its confidential settlement with a third subcontractor.

Helix Electric Inc. and Micco LLC said they oppose the May 22 settlement between the Regent and Performance Contracting Inc. (PCI) because they say it isn't a "good faith" settlement since they don't know its terms.

They say the Regent's deal with Performance could potentially cripple their defense against the resort's claims against them.

The Regent, which filed for Chapter 11 bankruptcy protection on Nov. 21, alleged PCI, former manager Victor DuBois and J.A. Jones Construction project manager Eric Brehm conspired to fabricate change orders.

The Regent claimed the change orders were fabricated to bill the casino for work that was allegedly never performed and to "reimburse" Performance for "extraordinary entertainment and other expenses" incurred to entertain the two men.

Helix said the Regent has a $600,000 claim of back charges against it.

It said a significant portion of the $600,000 is claimed by PCI and that it can't defend against the charges if it doesn't know the terms and conditions of the settlement.

Without knowing the details about the settlement, Helix said it can't determine whether PCI's alleged fraud has caused harm to Helix, "either due to false claims for work done by PCI or fraudulent back charges."

PCI had claimed it was owed money from the Regent for work PCI did to repair damages allegedly caused by Helix.

Helix said it must know the amount of back charges allegedly attributed to Helix to avoid a double recovery by the Regent.

"If the Resort is permitted to pursue these back charge claims based on PCI's alleged work, the Resort may avoid payment to PCI for work and still proceed against Helix for the alleged back charge," Helix said.

Micco also argued it wanted to avoid a double recovery by the Regent should PCI's back charges of about $450,000 against Micco be found to be illegitimate. Those charges involve fireproofing work PCI did to repair damages allegedly caused by Micco.

Micco disputes these back charges, saying it suspects these are fraudulent because DuBois, when asked in his deposition whether the back charges were legitimate, refused to answer on the grounds it might incriminate him.

"If these charges were illegitimate and there is no corresponding claim against Micco, (this) needs to be made clear. Otherwise the Resort may turn around and re-pursue those back charges against Micco and (other trade contractors) and gain a double recovery," it said.