Media group’s court filings seek rights to Web site

Friday, Oct. 8, 2004 | 10:59 a.m.

The company that operates the VEGAS.com Web site has asked a Clark County District Court judge to permit it to purchase the rights to use the rival lasvegas.com domain name.

VEGAS.com LLC filed court documents today requesting a jury trial in a response to a suit filed last month by two companies that currently lease the rights to lasvegas.com.

Last month, subsidiaries of Mandalay Resort Group and Caesars Entertainment Inc. filed suit against both VEGAS.com and Stephens Media Intellectual Property LLC, a subsidiary of the company that owns the Review-Journal. That suit asked a judge to declare which company should be entitled to acquire the rights to the lasvegas.com domain name after a dispute arose over a proposed VEGAS.com buyout of the rights to the name.

The case was reassigned to Judge David Wall last week after the original judge, Ron Parraguirre, recused himself.

Mandalay and Caesars, which acquired the lease to the lasvegas.com site from Stephens in February 2002 to help sell hotel rooms for the two companies' resorts, placed the Internet site under a company known as LAS Travel LLC.

According to the purchase agreement, LAS Travel or its owners had the right to transfer their interest in the domain name to the Greenspun Media Group, owners of VEGAS.com. Under terms of the agreement, if a deal was to be made with the Greenspun Media Group, a "notice of intent" was to be sent to Stephens. The agreement also stated that Stephens would then have a 30-day option to acquire the controlling interest in LAS Travel "at the price and on the same terms set forth in the notice of intent."

If Stephens failed to exercise its option, the agreement said, controlling interest in LAS Travel could be transferred to the Greenspun Media Group.

Court records say that in July Greenspun Media offered $12 million for the rights to the lasvegas.com name. Stephens was issued the "notice of intent" a day after the offer was made. On Aug. 19, Sherman Frederick, president of Stephens Media, sent a letter exercising the company's option rights. But on Aug. 24, VEGAS.com President Howard Lefkowitz responded that the Stephens bid did not match the terms of the VEGAS.com offer.

At issue is whether the Stephens response constituted a matching offer.

Because of that dispute, the Mandalay and Caesars subsidiaries opted to file suit against both VEGAS.com and Stephens Media, asking the judge for a ruling on which company it should sell to.

" ... The Stephens Media letter does not constitute an unambiguous, clear matching offer," VEGAS.com's court response says. "While it would have been a simple matter to simply indicate that Stephens Media would match all of the terms of the agreement between (the subsidiaries) and VEGAS.com, Stephens Media did not do so. Rather, in the Stephens Media letter, Stephens Media merely states that it is 'prepared to use commercially reasonable efforts to negotiate and sign a definitive purchase agreement and to close the transaction contemplated by such agreement within 30 days.' "

The response also says the owner of the Las Vegas Review-Journal violated terms of its joint operating agreement with the Las Vegas Sun in its establishment and maintenance of the lasvegas.com Web site. Under that agreement, the Review-Journal prints, markets, sells and distributes the Sun while the two publications maintain independent newsrooms.

The filing contends that the owner of the Review-Journal used joint operating agreement resources to acquire and maintain the Internet site and then developed the lease agreement to discriminate against the Sun and affiliates of the Greenspun Group.

VEGAS.com is seeking an injunction prohibiting Stephens from interfering with its purchase of the rights to the Internet address and for unspecified damages.

Phillip Peckman, chief executive of The Greenspun Corporation, parent company of VEGAS.com, said he had no comment on the filing.

Frederick said today he had not seen the filing and declined comment. He said he expects Stephens to file a response within a few days.

Frederick said that regardless of the outcome of the case, Stephens would retain ownership of the lasvegas.com address. What's at issue, he said, are the rights to the lease agreement between the hotels and one of the media companies.