Worries over right to name latest holdup in strip club deal

Wednesday, Dec. 19, 2007 | 7:01 a.m.

In August, Mark Hafer filed a sworn affidavit in federal court describing his effort to sell the Crazy Horse Too topless club on behalf of Rick Rizzolo, its jailed landlord, as the "most difficult" task he had ever undertaken in 24 years as an attorney in Las Vegas.

It was a task that Hafer, who reported running into obstacle after obstacle, wasn't able to complete.

Six weeks after Hafer pleaded for help from a federal judge overseeing the sale, the government lost patience and seized the club, also inheriting the effort to sell it, to ensure that Rizzolo satisfies $17 million in financial obligations outlined in his 2006 criminal plea agreement with the government.

Today the government may be running into some of the same obstacles as Hafer as it struggles to find someone with the willingness and wherewithal to buy a once-popular strip club that has been closed for more than five months.

And Hafer and Rizzolo, who is serving a 366-day federal prison term in Los Angeles, can only sit on the sidelines and watch as the club's value declines and Rizzolo's debts pile up with each passing day.

"I'm frustrated because there's no money in escrow," Hafer said. "Therefore, there's no legitimate deal, and we're running out of time."

The government informed U.S. District Judge Philip Pro in court three weeks ago that it had found a buyer ready to shell out $31 million for the club. The government's real estate agent says the deal is moving forward, and the parties will gather in Pro's courtroom Thursday for another status check. The buyer's name was not disclosed.

Hafer said he's concerned the deal is faltering, just like the several that fell apart on him this year before the government stepped into the fray.

Lawyers for the would-be buyer, Hafer said, told him they are worried they may not have all of the rights to the Crazy Horse Too name locked up.

"They are very concerned about the trade name," Hafer said. "They don't want to buy a lawsuit."

John Salvador, another suitor who was in the running before the club was seized by federal marshals, filed an application for the Crazy Horse Too trademark with the U.S. Patent and Trademark Office in Washington on August 30, records show.

Salvador, a 60-year-old retired Internet technology consultant who ran a dance club in Detroit in the 1970s and '80s, also filed articles of incorporation in Nevada on Sept. 13 for a company under the name of Crazy Horse Too, records show.

Salvador does not come recommended by the government, having failed an FBI background check, but he continues to seek the club.

He said he doesn't understand why the government disapproved of him, insisting his background is clean.

In a telephone interview from Detroit, Salvador said he has submitted a $36.1 million offer to buy Crazy Horse Too with the company marketing the club for the U.S. Marshals Service, commercial real estate giant CB Richard Ellis.

Hafer said Salvador's offer is more attractive to Rizzolo, who has piled up as much as $29 million in debts at the club since striking his criminal plea agreement with the government.

And Salvador said he's still in the running with CB Richard Ellis should the $31 million deal with the undisclosed buyer fall through.

Geoffrey West, the CB Richard Ellis executive handling the transaction, confirmed that Salvador is among several potential backup buyers.

But West denied that negotiations with the undisclosed buyer have hit a snag.

"Everyone is very motivated to see this deal done," West said. "This is just people verifying that they're getting what they thought they were getting."