Suit: Firm used terror as pretext to cancel

Tuesday, Oct. 16, 2001 | 9:16 a.m.

The MGM Grand hotel-casino sued a New York firm in a dispute over whether the terrorist attacks were the reason the company canceled a Las Vegas convention.

MGM sued to recover $274,000 in cancellation fees from Xelus Corp. of Fairport, N.Y., in Clark County District Court.

MGM said Xelus could have held its conference at the Las Vegas casino resort Oct. 6-13, but improperly used the Sept. 11 terrorist attacks as a pretext to cancel because it was struggling to sign up conference attendees.

Xelus, however, said it was justified in cancelling and should be excused from paying damages to MGM because the events of Sept. 11 were beyond its control.

Alan Feldman, spokesman for MGM parent MGM MIRAGE, said MGM accepted cancellations for conventions that were scheduled to start Sept. 13, but said Xelus' cancellation wasn't acceptable because its conference was scheduled in October.

"Most cancellations had stopped around Oct. 1, and almost everyone is now sticking to their schedules. Once (McCarran) got back to 93 percent of its capacity, it was obvious people would be able to come," he said. "We've tried to work with Xelus. But it is using the terrible events of Sept. 11 as an excuse to cancel a convention it was having trouble filling."

MGM said it agreed on Sept. 7 to reduce its room rates to help Xelus attract more people to the conference.

Xelus declined comment on the allegations.