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Wednesday, Jan. 6, 2010 | 9:06 a.m.
Sun Coverage
The economic downturn and heightened competition have pushed a Las Vegas topless dancing club into bankruptcy.
The owner of Sheri's Cabaret, 2580 S. Highland Drive, filed for Chapter 11 reorganization last month and has proposed to reorganize by temporarily lowering its mortgage payments to two banks.
Owner Sutter Street Investments LLC filed for reorganization Dec. 21. A sister company that owns the Sheri's building, Highland Street Group LLC, had filed for bankruptcy on Sept. 22.
David Frank, manager of Resort Entertainment Companies LLC, a Las Vegas company that manages Sutter Street, said in a court filing that Sheri's has been operating since 2003 and in 2005 agreed to pay rent to Highland of $30,000 per month.
"The debtor’s operation of the cabaret business was successful for the first four years of its operation. However, as a result of the current economic downturn and increasingly aggressive competition in the cabaret industry, business during the past two years has been slow and revenues have been reduced. This has resulted in reduced customer traffic and the debtor’s profitability has decreased," Frank said in his filing. "However, the debtor’s obligations have remained the same or have increased. With its current revenues the debtor is still able to meet most its financial obligations, with the exception of its monthly rent to Highland and certain other large non-recurring obligations.
He said in his filing that Sheri's generates $20,000 to $26,000 per week in gross income and that it has 17 employees -- not counting exotic dancers who are independent contractors.
The employees earn from $7.55 to $25 per hour in jobs including management, bartenders, servers and security, Frank's court filing said.
In its bankruptcy filing, Highland Street listed assets of $8.159 million including $8.1 million for its real estate. Its liabilities totaled $5.822 million.
Highland Street has proposed to reorganize by temporarily reducing payments to mortgage holders City National Bank, owed $3.5 million; and Bank of Nevada, owed $348,000.
The reorganization plan calls for interest-only payments to City National of 2 percent for one year, to be stepped up to 3 percent and 4 percent in the following years. After three years, Highland Street proposes to pay off the mortgage over 25 years at 4.25 percent.
Bank of Nevada's loan would be paid based on the same terms.
Insiders that made loans to Highland Street totaling $1.7 million would receive no payments, but their claims would be preserved and potentially paid should the business be sold, the reorganization plan says.
The insiders include some of the owners of the club including Frank, of Woodland Hills, Calif., owed $448,000; and Merlin's Highland LLC of Las Vegas, owed $1.1 million.
Creditors of Sheri's and Highland Street have not yet filed their responses to the reorganization plan, which was proposed Dec. 21.
Damn! Sheri's went t1ts up!
Do you think all that cash at the door is going on the books??
This economy will put a shirt right on your back!
Now, Adult entertainment is going bust!
Flint and "the girls gone wild guy" were right, we need an adult entertainment stimulus package.
Dang, no pictures.
Too bad they didn't have the strippermobile..
I like this line: "Sheri's generates $20,000 to $26,000 per week in gross income".
Is that the writer's way of trying to describe the ladies that work there? If so, that's not very nice.
Sounds like she lost her shorts at the strip club?
After Harry Reid and Obama lose their jobs, they could start a LLC
and buy this place
karma.
i did some work for "strip" magazine about 3 years ago during AVN and we shared a booth with these guys.
we were handing out STACKS and STACKS of the magazine advertising THEIR clubs and they were yelling at me about how the magazines were taking up space in the booth and just acting like they were big shots to impress the adult stars.
then at the very end the guy from seamless said "come over tonight with all your friends and i'll hook you up".
brought 8 or 9 people with me and after buying a $300 bottle of vodka...he didn't even come over to our table one time. classless.
the biggest bunch of jerks i have ever met.
good riddance.
Damn, now mom's moving back in.
Start shakin' that money maker a little harder !
This town and everyone involved was better off when all that existed were Crazyhorse I/II,and I believe it was the "Pussycat Club" which is now Club Paradise...The drinks were still pretty cheap, security in those places didn't act like a bunch of personal bodyguards and referees walkin around, and the poledancers were happier makin' better money, which made for better quality entertainment....And then came the big "Vegas gold rush" in the early 90s and the clubs started springing up like Convenience stores all over the place... The greedy-ness/overkill ruined alot of that gig too, Gee,... Greed brings out the worst in some people, reminds of that movie "Treasures of Sierra Madre" with Humphree Bogart and Tim Holt towards the end..sad...
also, the "talent" at these places has really been watered down.
i pretty much stopped going about 3 years ago. too many super-aggressive and pushy russian women.
yuck.
Exactly, Stevem... if I wanted some overbearing Eastern European, I'd go to the Czech Republic...
Hell even Larrys Villa does better than that club.... Maybe they got all the ugly ones from Deja vu.....
That gross income,, I wonder if that includes what the independant contractors pay to the house.....ooops..
30k a month for rent seems awfully steep. These places never get any of my business anyway I've never set foot in an adult club (been invited before, but declined). Like the Hyundai dealership on Sahara last week, No loss here. Good to know that business is slow at these clubs, maybe that will cause divorce lawyers to lose business too!
Tally-Ho!
I guess there is only one recession-proof industry--collection agencies: according to this article, Buffalo is the collections capital of the U.S.
http://www.boston.com/business/articles/...
Well, when all the high paying clientele VIP johns (customers) keep getting busted like Tiger Woods, Senator Ensign, Eliot Spitzer and others alike.... no wonder the rip clubs cant support themselves to remain in business.