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Published Wednesday, March 17, 2010 | 10:37 a.m.
Updated Wednesday, March 17, 2010 | 1:19 p.m.
Related Document (.pdf)
The owner of the Rumjungle nightclub at Mandalay Bay resort in Las Vegas filed for Chapter 11 bankruptcy reorganization Tuesday, saying it needs court protection to prevent Mandalay Bay from shutting it down.
The bankruptcy filing by Rumjungle Las Vegas LLC listed assets of $12 million and liabilities of $1.145 million, including $1.1 million in rent owed to Mandalay Bay -- an amount Rumjungle said is disputed.
Rumjungle, in a statement today, said it's been locked in a legal dispute with the MGM Mirage property over Mandalay Bay's opening of the eyecandy sound lounge, an action Rumjungle says violates its contract allowing it to be the sole nightclub on the property.
Rumjungle said "the unlawful competition from eyecandy and other venues has adversely impacted Rumjungle’s finances.''
A spokesman on Wednesday said MGM Mirage was unable to comment on the issue because it's a matter of pending litigation.
"It is our goal that Rumjungle will remain open and all employees will remain employed while we assert our contractual right to be the sole nightclub at Mandalay Bay," Neil Faggen, manager of Rumjungle, said today in a statement. "With the exception of this dispute, Rumjungle's finances are in good order and we continue to provide a unique and first-class dining and nightclub experience."
"Mandalay Bay has no right to resort to intimidation or threats of closure when we believe it is Mandalay Bay that has violated the nightclub-exclusive provision of our lease agreement," Faggen said in his statement. "Rumjungle has acted in good faith at all times, and we will continue to fight for our employees and valued customers.''
The bankruptcy filing said gross revenue from the club of $16.2 million in 2007 fell to $10 million in 2008 and $6.6 million in 2009 -- though it's unclear how much of that decline was tied to the recession and how much was associated with the dispute with Mandalay Bay.
In a lawsuit filed in District Court for Clark County in September 2008, Rumjungle and Red Square restaurant at Mandalay Bay said that along with China Grill and Red White & Blue restaurants they were "part of a group of entities informally affiliated through common management and ownership" known as the China Grill affiliates.
Rumjungle and Red Square charged in the lawsuit that the relationship between the China Grill affiliates and Mandalay Bay started to sour in June 2004. when MGM Mirage agreed to acquire Mandalay Resort Group, which at that time owned Mandalay Bay.
"This deterioration was due to the new officers' dissatisfaction with being `stuck with' the long-term leases held by the China Grill affiliates and has manifested itself in numerous circumstances where they have refused to abide by the preexisting written agreements embodied in the leases with the China Grill affiliates," the Rumjungle and Red Square lawsuit charged.
But in court papers filed last August, attorneys for MGM Mirage disputed the allegations and said: "Rumjungle and Red Square's claims are barred by its prior material breach of their agreements" and by the statute of frauds.
Trial in that lawsuit is set for later this year, Rumjungle said in its statement Wednesday.
an another one bites the dust
As long as Red Square sticks around, I could care less about the idiotic nightclubs..wait a minute.. I don't drink anymore..Anyway if I did drink, Red Square at Mandalay Bay Hotel/Casino is THE best vodka bar around!!!
Agreed!I always have drinks at Red Square whether I'm stayin' at MBay or not! Join the Party :-)
If I read the article correctly, virtually all the debt owed is for rent to Mandalay Bay. Why do they not just pay the rent, or at least pay it into court, while the litigation is dealt with?
Is there more to this story?
Is there any place left in Vegas like the old casino lounges playing good 50's-70's party music? Also not filled with gun-totin yahoos.
I only went there once. The drink service was very poor..the bartender and waitress completely ignored us....we sat with empty drinks for over 10 minutes and it wasn't even that busy. Good riddens to poor service and their protectionist union.
This place is a total dump and actually now serves lunch? The nights it does pretend to be a nightclub, it attracts a low-class ghetto crowd that I am sure horrifies any patron of the wonderful casino. The sooner it shuts down, the sooner MB can put a real nightclub in one of what happens to be my favorite casinos. Don't let the door hit you on the way out Rum Jungle.
These clubbers can now set up in our bustling Tent Cities. The shocking reality from the Trickle Down era in America...
Foreclosed nightclubs would make conversion condos for those forclosed out of houses / only fair -- saw a cool site; Balkingpoints ; incredible satellite view of earth
Back in 2005, when people would come to Vegas just to have a "Vegas Experience" they would buy the $1,000 bottle of Popov, but now in 2010 these clubs are having a "hard" time making ends meet because back when they signed an overpriced lease they could get their money back on overpriced drinks.
When the cash cow dries up in a recession, it sure is tough to pay that rent huh?
Nobody wants a "Vegas Experience" in 2010. For $1,000 I can eat for four months instead of drinking fourth rate vodka. I think the rest of the country - and probably the world - figured that out sometime between 2008 and now.
Oh well, in the future these nightclubs will get back to booming again but not until 2023 or 2024 when the economic cycle gets back up. See you then, because it's bust right now.
If my understanding is correct this is a strategic chapter 11 filing since it appears Rumjungle LLC is solvent now - they are seeking a stay from paying rent. Rather than risk a normal action in state court over their contractual rights (whether eyecandy counts as a "nightclub" as defined in their contract) they can avoid damages potentially due from failure to pay rent if they get the automatic stay from debts from the bankruptcy court. Rumjungle also may want to seek a federal venue for their contract dispute, which they achieve via their chapter 11 filing, rather than risk the action in a state court which may be biased to the casino operator.
Regardless of the dispute, the place is a dump and attracts a dumpy crowd. It's bad business for both sides and should go away.
How it goes away will be decided in court. Neither side has deep pockets anymore. The Operator is underperforming and the Landlord is fighting bankruptcy of their own because their GIGANTIC (nice business move, CityCenter) company is underperforming.
Poor Babies.
To all of you haters of Rum Jungle. First, bottle service costs around 150 for sky vodka, not popov. Second, when was your bad experience? If it has not been in the last year and a half under the new management, try again, I guarantee that the food will blow you away and the service will be incredible. The fact that MGM does not want to honor the lease agreements set forth in the contracts made between Mandalay Bay and China Grill Management is the issue. If you have not been to an establishment in the last year there is no reason to slam the business, thus causing those employed there to lose money. I bet if you had a great experience there you would not have even made a comment you just like to slam things, haters.
Hey Eidkaw;
I can buy a bottle of SKY for $16 bucks. Wow, $150 sounds like a bargain
for fools like you
Thank you, Boomer. Greed, Greed, and more greed and they wonder why? Tell me this, Eidkaw: How about a bottle of Patron? Lemme guess, closer to $300 right? That's $32 bottle.
Eidkaw, no need to send me a personal note. We can discuss anything you want here.
You wrote me:
"Get a life and stop hopping that my place of employment will go out of business. Where do you work? I would like to slander it as well you douche."
I say....My place of employment is non of your business. I will tell you that I do not depend on gratuities from patrons whose order I take on a daily basis. Perhaps applying some of that tip money towards a specific specialty/certification will expand your options. Just a thought.
Finally, my original comment was not slander. It was my opinion and one that's shared by most if not all my friends. I have frequented Rum Jungle enough to know this hospitality-rich city has dozens of better options than your offering. And, the crowd you attract is exactly as I described it. You didn't really dispute that, did you?
Did Forty Deuce not count as a nightclub when that was open? Or did it not count because it was technically in Mandalay Place and not Manadalay Bay?
Haven't been to rumjungle for the nightclub in many years... But went there for lunch last summer and it was very good!
Rumjungle rhymes with?
I think I hear eidkaw crying...? And then sending out personal / direct emails. That's hysterical!
Since you brought it up, I was in there yesterday and it smelled SO BAD, I left.
And this was during dinner hour...?
The bottom line is the place is SO Tired, it needs to be closed and done over. It would be good for that space and good for the building.
I have no attachement to this. I'm unbiased.
If you don't see this as reality, you are too close to the drama. Save the drama for your mama.
Would love to see every one of the nightclubs fail. Each one that fails should open the eyes of these owners/corp's that Las Vegas needs to get back to offering value to it's customers...not raking them over the coals with $400 bottle service. $400 for a bottle of booze that costs $2.20 to create? Um, right.
the owners of Rumjungle better watch out,their partner in Macau Stanley Ho and the Triads will pay them A visit.
rumjungle sucks, there are so many other places to go that are way better. just the truth.
I hate to see any business fail. Las Vegas is going through a tough time right now. To some people Rum Jungle is just a club and to others that is how they are paying their bills. It's an honest earning. It seems like everyone is losing their job left and right no matter what their occupation is. We are top ranked state on the unemployment list in the country. I am just glad that I am gainfully employed in this time of recession.
peppermill, bundy5.
enjoy it while you can. i hear it's not long for this world. convention business is way down, the stardust and frontier across the street are gone and that lack of business is crushing it.
i remember my first trip to vegas i thought the "flame" exterior of rumjungle was just so so so cool, but this club ran its course. there's only so much market share to go around and pure, prive', etc. took a lot from this place just as some place will open and take market share from them.
Losing almost $10 million in three years? Man - even with the rotten economy that's almost a 41% drop according the the numbers. 41% - yeah - gotta' be a reason for that in addition to the economy.
(Hmm - maybe if they would have even give me an interview in the Marketing Dept. I could have helped.)
Wow... People whining about bottle service. Surprise! Never heard that before. If you don't want bottle service, don't get bottle service.
You aren't paying for the vodka, people, and if you don't know what you are paying for when you get bottle service, then it isn't for you. This is like saying "Who would pay and overpriced $65,000 for a Mercedes-Benz when I'm sure the parts cost about $10,000..." Please.
Not everything is for everyone. Can't you grow up and accept that?
My thoughts exactly RPJ!!! The club that charges X amount for bottle service isn't for everyone. Just like the house that goes for X amount isn't for everyone. Some of us pay that premium to realize it was worth it and it means a good time will be had. People don't realize that the only thing a club sells is ALCOHOL, (the door fee is a fail safe just in case people don't buy alcohol). If they sold it at cost or what the liquor store charges there would be no club. Payroll, property taxes, amenities, DJ fee's, utilities, cleaning crews none of these are cheap. Most clubs have only 3 days a week, (Thursday-Saturday) for four weeks to make a monthly profit. It's not a lot of time. So they charge more for everything. Get used to it, the overpriced drinks and bottle service aren't going anywhere. And if you have to take your cheap business elsewhere I'm sure the club will be happy to see you leave. If you want a great experience, it's not going to be cheap or free. Same can be said of clothes, cars, and life.
People paying $400 for a bottle of vodka is a symbol of why the U.S. is about to experience an economic holocaust. think about it. Buy guns and food people.
This is simply about " discretionary income " and even the heir/heiress that party from midnight until 8am are not that plentiful anymore
Nightclubs cannot survive with the occasional tourist dropping in for 1-2 drinks while ogling our locals who just completed their retail stint at the lipsticked pig they call crystals
the boys/girls who frequented our clubs that made the trek up I15 no longer make that route part of their thursday night ritual,with the return trip monday am,all the while telling their friends to hush while they call in sick
most of the LA crowd stay alot more localized,therefore hurting the " club scene "
peace out
wow...it sounds like there's a lot of bitter old men here.
$400 bottles of vodka is the reason the u.s.a. is in so much trouble?
huh?
i would say that we have a free market system that will allow people to buy $400 bottles of vodka is a GOOD thing.
nothing...NOTHING is over-priced if people PAY that price for it.
porsche, starbucks, bottle service at pure is worth exactly what people will pay for it. it's never over-priced.
if you went in to mcdonald's tomorrow and a big mac was $19.00, it would be over-priced UNLESS...someone paid $19.00 for it. then it would no longer over-priced.
Come on.. Not Red Square, prob the LAST place that I would want to close... Rum Jungle, eh but not Red Square...
Section 365 of the Bankruptcy Code sets a very fast track to resolve non-payment of rent issues. At most, these China Grill people are going to have to start paying rent within 120 days.
Of course, if the judge really believes these China Grill people's claims that MGM Mirage breached the lease, they are unlikely to be evicted.
However, if the judge doesn't believe the landlord-breached-the-lease claims, the tenants will be gone.
Wow. I certainly hope all ends well for everyone who is employed at both properties. If there was a breach in contract then whoever is at fault should be responsible. This isn't about rumjungle going out of business due to lack of profit. It's about one or the other not living up to their end of the deal. Chapter 11 freezes Madalay Bay from taking action to shut the place down until the court case is settled. I don't see anything good coming from putting several people out of work because of an argument. This country is in enough of an economic turd for reasons beyond a 1.1 million dollar dispute between two companies that generate millions each year.
RumJungle has always been a Shady Nightclub !!! Karma Sucks....
PATHETIC SERVICE---I MEAN REALLY BAD, one of these places with a bunch of kids working the key positions--making you wait a lot because your lucky to be in such a "hip" place spending your money! The drinks sucked and were undrinkable--the prices were sky high for drinks and food, the waiter brought the wrong entre for my friend, so we shared my food waiting, so he came back 25 minutes later with his food and gave us some crappy desert dish as a make up for his mistake----Sorry you can't fix that kind of mistake with a $hit piece of cake-which also $ucked. Then the astronomical bill appears! Then when we left, i forgot my sunglasses on the table as we were leaving--we were gone less than 2 minutes (as soon as i got outside) when i realized i forgot my sunglasses--i went back real quick and the table was being bussed---the bus person claimed they gave the glasses to one of the waiter people--who claimed the bartender had them, who claimed someone else had them---anyways after waiting 10 minutes for a manager to respond (while my guest is waiting for me) THEY STOLE MY FREAKN GLASSES! I finally wrote it off as another $uck out place that wouldn't last---WHAT TOOK SO LONG! Good Bye!
I'm going to have to side with those arguing about the high prices these clubs charge. It's only a matter of time before they all start closing down and filing for bankruptcy protection. Honestly, I bought a round (3 mixed drinks) at a similar club and paid $60.00 which included 15% gratuity. For that price, you'd think I would have gotten something pint sized...nope it was a teeny tiny glass that was the size of a double shot. Seriously? I stay out of clubs for that specific reason, not to mention stumbling 20 somethings that want to act like Paris Hilton, Lindsey Lohan, or Lauren Conrad. I don't need a babbling 20 something drunk possibly spilling my drink...that I overpaid for. I know they have to make a profit somehow, but c'mon...what are they taking in like 200% profit from bottle service, and at least 400% from individual drinks.
Suggestion to RJ and other bars at the Mandaray: Lower your GD drink prices.
That bar is in a great location -- right when you walk in from the parking garage. How the hell could it be having financial problems?Thousands of people walk by it everyday.
I know -- maybe people are GD sick of paying $20 for a rum and coke? Get a clue out there -- there are only so many idiots willing to burn through $$$ on overpriced drinks. Duh.
Just another example of the chickens coming home to roost. Change your ways or die... it's very simple.
Casino Nightclubs are just the next shoe to drop. Planet Hollywood is another example. Peeps are not going to spend $300 on a bottle of distilled corn-mash, a bucket of tap-water ice, and some high-fructose corn syrup with cranberry flavoring.
Remember "Party @ the Hard Rock" - with all those clowns hoping their credit cards have enough juice left to pay the tab? It's sad state of affairs when the only club-goers with the means to increase cash-flow to pay tabs - are the hookers and drug dealers who infest these venues! The Vegas nightclubs are the poser's playground and they ran out of credit early 2009.
To GooGooDolls:
I agree that Rum Jungle is sleepy and is at the end of its life span. It can't compete with the Light Group or Pure Management Group. However, if dumb tourists or others looking to show off and feel important, continue to pay $400 per bottle to sit at a table in Pure, Haze, XS, Tao, Tryst...you name the place, then these clubs will not lower their prices.
I truly believe the club industry in Las Vegas will bottom out. I do go out a lot, at least two weekends a month. From my perspective, the night spots that will survive are the ones which are controlled and owned by the hotels they are in such as Vanity, XS and Tryst. They can control costs, give discounts and comp drinks more than the independent operators who have to pay enormous overhead and lease costs. Along with the outrageous price of bottle service, a Mojito at Haze will cost you $19!!!
The IRS investigation in 2008 and Prive's shut down last year were just the beginning of major changes to this overblown and overcrowded business model here in Las Vegas.
Orbitrocks,
You are correct.
Guess people are staying home and eating beans and rice while they listen to Dave Ramsies
What? Couldn't they sell enough $50 drinks?
LasVegas9 hit the nail on the head. A comment from someone who actually goes to the clubs on a regular basis. Every so often we did enjoy going to one of the clubs when company came in and enjoyed it to an extent; we found what was more annoying then the expensive drinks were the 20-somethings who couldn't hold their liquor. Nothing is worse then seeing a pretty young girl in her $300 outfit staggering out of a place, barely able to stand up because she was drunk. Didn't their mamas tell them to always act like a lady when drinking and not some piece of trash?
We went to Rumjungle back in 2001 before going to see Mama Mia. We actually had a good time there and their Painkillers were fantastic!! And has been mentioned from others - if people are willing to pay $400 for a $40 bottle of vodka - that practice is not going to go away anytime soon.
why would anyone pay to get in a club just to pay $10+ for drinks is beyond me.
Nothing like justice - pay your bills!! The bouncers were nothing but rude. The waitresses treated you like 2nd class citizens. You never felt welcome there. No compete clause in the contract? Why try? This has been an eye sore for the entire resort. Unions anybody?? I guess if you plan to spend $500 to $1000 on bottle service they may treat you better. My wife and I just wanted to have a drink or two and dance a little. We had to deal with all the thugs, doormen, snobby waitresses, etc. RIP.
The person who invented the very unnecessary "bottle service" is a genious. Create a way to separate stupid people from their money. To those who pay it, enjoy it. Most of us are not fools.
It used to be that restaurants/ clubs did very well selling a bottle for $35-40 that might cost $15-20 at a liquor store. That allowed plenty of margin to pay the bills and take a nice profit.
The gross over charging (bottle service) worked while there were plenty of people with money or company credit cards to pay. But few have that kind of money and the employers are looking at their credit card bills with a lot more scrutiny.
These clubs are over priced, dangerous, and simply not fun.
We go to Toby Keith's or B.B. Kings when we're in L.V. No cover, or a minimal $5.00 sometimes, great food, great music and outstanding service. A couple can have a nice evening out, eat dinner, dance, listen to live music and have a good time for less than $100, including an above average tip. I recommend either for a fine experience.
The trendy clubs are past their usefulness.
RPJ,
I agree with you fully. When someone purchases "bottle service" they are given a private area for their friends (5-infinity depending on how many bottles you buy), the service of the staff to find new "friends", and a place to sit (a very important and hard to find thing in the nightclub industry). Some clubs charge $200 for bottles, some charge more. There isn't a going-rate for bottle service. If you figure that you could make 20 drinks from one bottle of vodka, that's $10 per drink (not bad eh). It's really the most cost-efficient way to drink as a group in a nightclub and they throw in the to the service of the staff and your private area. Not too shabby. All you had to do was pay $10 a drink.
If you like dive bars, or you don't have a large group of friends when you go out, bottle service probably isn't the best option for you. But if you go to a nightclub 4-5 a year with a group, it makes sense and can be an awesome way to not have to wait in any lines, have a place to sit, get refilled quickly, and pay only around $10 per drink.
For the rest of you - if you didn't know, now you know.
Last time I was there, I waited in line for over an hour. Too bad, they think, I am not sexy enough to get in. Too bad, cause I am big tipper, and I buy alot of drinks for friends. Now, I buy them somewhere else. Too bad, enjoy your bankruptcy.
I guess we're a different lot than those that want to pay $400 for a bottle of liquor. Sure we can afford it. We just think it's a waste.
But I suppose some folks like to invest their money while others prefer to drink it away. To each their own. I guess I'll always wonder if it's one of the clubbers who is serving me my coffee when I hit the coffee shop during early retirement...think about it...
Somebody asked on an above post what rhymes with Rumjungle? Bankruptcy.
OBTW - what ever happened to the firefighter from California that was savagely beaten by the bouncers or doormen? I heard the guy was paralyzed for life. I was also told he was doing NOTHING - they almost killed the "wrong" person. What a racket. MGM Mirage would be doing all of us a favor to shut this hell hole down.
Thanks Hahaha!
I have never used "bottle service" and was wondering if people were actually just paying $400 for a bottle. But if you get seated, have your own area, and get drinks faster, i like this. If I have 4-5 friends, it is very frustrating waiting to get in, then finding a place to stand...because there are never any seats in most clubs. So the "bottle" service may be worth it, at the right club.
Why did they wait 6 years to file this? Eye Candy, Mix Lounge and others have been open at MB for years.
Maybe biz is down all over the hotel because of the ripoff casino games like 6/5 blackjack in there? MGM -- how stupid do you think people are?
venuspool
You need to at least try to get one fact straight. The firefighter was not savagely beaten, he was not paralyzed, and he was not the wrong person.
He was denied entry for being intoxicated, he tried to fight the rumjungle staff, then the Mandalay Security staff (he was injured as a result of his own actions) and even attempted to fight the paramedics who responded to assist him.
It was an extremely unfortunate incident, and the case was settled out of court because all of the evidence pointed to the fact that the firefighter was completely at fault.
venuspool
Before you trumpet that the settlement would have showed guilt, the settlement was most likely for an extremely lower amount than would have been necessary to actually win the case. So all in all, a pretty astute business decision.
And as far as your comment to "pay your bills", if you actually read the article, there is a legal dispute over the one bill that is not being paid.
For all of the posters that disagree with paying $300 for a $32 bottle of liquor, no one is forcing you to do it and you are not obviously the target market. Fortunately for the Las Vegas nightclub operators, there is a significant population that is willing and able to as fully one quarter of the top 100 nightclubs in America are located in Las Vegas and rumjungle is one of them.
The $300 to $400 dollars for the bottle has never been about the liquor, it has to do with the real estate and the music. You get to sit at a table, have a server pour deinks for you, pass the line at the rest room...etc.
Just remember that you are the same people that will go to Applebees or Chilis and pay $14 to $16 dollars for an 8oz chicken entree that you could buy at Smiths for less than a dollar. Dont forget the beer you willingly pay $4 to $5 for that you can get for less than a dollar as well.
And when you look at the pricing for a cocktail at the bar, if you bought cocktails at the bar at $12 each, for the 25 drinks you can get out of the bottle, you are now out $300.
If you dont like the prices, as you have already stated, then just don't go.
LasVegas9:
your actually wrong about Tryst, XS, and Vanity, they are all run by outside companies, and partially owned by their respective casino in terms of profit sharing. I can tell you that Tryst/XS/Drai's are all run by Victor Drai's company, and Vanity/ Wasted Space/Rehab are all run by the Nightlife Group LLC.
hahaha:
you hit it on the head in terms of bottle service!