Web site’s owner argues for rights to lease name

Thursday, Oct. 14, 2004 | 11:23 a.m.

The company that owns the lasvegas.com domain name says that it has the only valid contract to reacquire the rights to lease the name.

In an answer to a complaint filed Tuesday in Clark County District Court, Stephens Media Intellectual Property LLC, a subsidiary of the company that owns the Las Vegas Review-Journal, denied that VEGAS.com LLC has a valid contract to acquire a company known as LAS Travel LLC.

LAS Travel is a holding company formed by subsidiaries of Mandalay Resort Group and Caesars Entertainment Inc., which in February 2002 acquired the rights to use the lasvegas.com domain name to help the resort companies sell hotel rooms.

Last month, the Mandalay and Caesars subsidiaries filed suit against both VEGAS.com and Stephens Media. That suit asked a judge to declare which company should be entitled to acquire the rights to the domain name after a dispute arose over a proposed VEGAS.com buyout of the rights to the name.

The case is being heard by Judge David Wall.

According to the original agreement between Stephens and the two hotel companies, LAS Travel or its owners had the right to transfer their interest in the domain name to the Greenspun Media Group, the owner 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 Media. 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 Media 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.

VEGAS.com filed an answer and cross claim in the case last week. In it, the company asked the judge to permit it to purchase the rights to use the lasvegas.com name.

The VEGAS.com response said the Stephens letter was ambiguous and didn't clearly present a matching offer. The response also said the Review-Journal violated terms of its joint operating agreement with the Las Vegas Sun in its establishment and maintenance of the lasvegas.com website. 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.

The Stephens reply filed this week said the Lefkowitz letter alleging that Stephens' bid did not match the VEGAS.com offer "is evidence of the continuing and deliberate efforts of the Greenspun Group to interfere with and destroy Stephens' contract right to acquire the plaintiffs' interests in LAS Travel and to improperly enlist the aid of one of the plaintiffs in doing so."

The filing said Stephens denies there is a contract dispute with VEGAS.com because Stephens has "the only valid contract to purchase LAS Travel."

The Stephens response did not address VEGAS.com's claims regarding violation of joint operating agreement terms.

Phillip Peckman, chief executive of The Greenspun Corporation, parent company of VEGAS.com, could not be reached for comment on the filing.