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Sam Morris / File photo
Patrons step up to the bar and fill the dance floor at Pure in Caesars Palace.
Thursday, Sept. 30, 2010 | 7:09 p.m.
Sun archives
- Nightclub operator Angel Management Group to acquire Pure Management Group (9-29-2010)
- Pure launches compliance program in wake of IRS probe (5-27-2010)
- Clubs’ cash flow probed at top (3-1-2008)
- Clubs’ cash flow suspect (2-28-2008)
- IRS “raids” Pure Nightclub (2-20-2008)
- Tipping the scales of fair play by IRS (10-24-2005)
Professional tennis’ husband-wife duo Andre Agassi and Steffi Graf, who own a stake in Pure nightclub, claim that managers of the club mismanaged finances and used money from Pure to fund competing nightclubs, according to a lawsuit filed this week.
Agassi and Graf, along with other part-owners Darren Cahill, Ron Boreta and Todd Wilson, are suing Pure Management Group, its associated companies and former executives for breach of fiduciary duties, breach of contract, negligence and misappropriation, among other claims in the lawsuit.
The five individuals are owners of Touch LLC, which has operated Pure nightclub at Caesars Palace since it opened in 2004.
The lawsuit was filed in Clark County District Court on Tuesday, one day before Angel Management Group announced it had reached a deal to acquire Pure Management’s nine venues.
A spokeswoman for Pure Management said the company does not comment on pending litigation.
Following the success of the Pure nightclub, the lawsuit alleges, Pure’s manager, Touch Management LLC, and Pure executives Steve Davidovici and Robert Frey, formed other entities, such as Pure Management Group, to open other nightclubs that would compete with Pure.
Pure Management Group opened LAX nightclub at the Luxor in 2007 and Christian Audigier nightclub at Treasure Island in 2008. Pure Management Group also owns and operates the adult pool at Caesars Palace, two bars and two restaurants in Las Vegas.
By 2007, Pure Management Group was operating other nightclubs, bars and restaurants and began to charge Touch LLC for certain corporate expenses not related to the management of Pure, the lawsuit alleges.
The expenses included an increase in Pure Management’s corporate salaries from $380,000 in 2005 to $1 million in 2007 and rent for its corporate headquarters, which increased from about $2,360 per month to $22,913 per month during the same period, the lawsuit says.
Overall, the lawsuit claims, corporate expenses charged to Pure nightclub by Pure Management nearly tripled. The lawsuit states that sales, marketing and public relations costs directly paid by Pure nightclub increased sharply as well.
The lawsuit also says that following an Internal Revenue Service investigation of Pure nightclub in February 2008 involving the club’s cash-handling and tipping policies, Pure Management used Touch funds to pay $1 million-plus legal fees.
Recession is so bad and the middle class so broke that the rich must now steel from each other, this well be better than another cirque show.
In a large cash business, this goes on all the time.
Business 101: Unless you are a active owner, never invest in an high cash business. Good luck proving most of this and then not having the IRS sitting in at the trial taking notes.
FYI: STEAL, not STEEL, but I get your message.
js
Shouldn't it be "fiduciary" and not "judiciary"?
Matadams4u: You are, indeed, correct. It's been changed. Thank you.
Comment removed by moderator. Off-topic.
Chunky says:
Everything was fine when the clubs were filled to the max with hours-long lines waiting to get in to spend $600++ for bottle service!
Mr. & Mrs. Chunks don't have the cool wardrobe and hipster style for such clubs and now it seems a lot of those who did no longer have the cash to waste on an Ultra-lounge hipster fashionista night out!
All the pigs had their noses buried in the trough and now that the trough has gone dry their just pigs in a blanket!
That's what Chunky thinks!
Chunky is well past the age and psychographics of someone who would visit a nightclub. Chunky is a little sad that he no longer has "it" and cannot get into a nightclub in Vegas. Chunky is therefore celebrating that what he calls "pigs" are now poor. Does Chunky think that people with style and money will somehow acquiesce to his lame and boring lifestyle? Chunky should get back to reruns of Matlock, that's what RPJ thinks.
Chunky says!
LOL! The Chunks aren't that old and they eat out more often than not but they prefer upscale dining and a casual atmosphere to the lounge scene.
Plus, it's hard to get out and enjoy the great outdoors hiking and biking after a late night hangover!
Chunky enjoys his work in the various clubs and casinos for special events but prefers to be there as a paid performer than a wanna-be in yet another Ed Hardy / Christian Audigier shirt and his Chunky-locks slicked up PeeWee Herman style!
Thanks for the kind words and glad you're occasionally entertained by the Chunkster!
That's what Chunky thinks!
I like chunky's posts also. They are very good and funny too.
In that vein, RPJ's post to chunky was as creative as all get out.
That's what denro thinks!
(See, now you have me doing it, chunky!)
I went into the former Light (now the Bank) nightclub at Bellagio and paid like $20.00 bucks to get in.
After I was in I wondered what the big deal was and how it was possibly worth the price of admission.
It went entirely over my head where the value was.
As far as I could see, it was just a room to be in and drink, and that was pretty much it.
Nightclubs are over rated. I'm shocked the amount of money people pay to get in just for $10 drinks and if you want to sit down anywhere, that'll cost yah $400 bottle service.
If you get in good with the bouncers and door hosts, you can avoid the cover charges even on weekends. Even better, some bouncers are cool where they will let you sit at the tables for free as long you order a couple of drinks from the waitresses. Of course when the person who paid for the table finally shows up at 12:30 am then you have to leave...haha. But if nobody buys the table, they will let you sit there and order regular priced drinks without the $400 plus bottle service. To avoid paying cover charges and standing in line or anything, it takes networking. The best thing to do is go on an off night and talk to the guys who work the door, get their card and make conversation with them.
I agree with sevenhills. The clubs are very overrated, but there are still tons of out of towners craving the Las Vegas club experience. Most groups are dudes who split the cost of the bottle service, then the women will be there because they dont pay jack to get in and freely partake in these dudes bottle service. I also agree with LasVegas9...most locals follow his network technique, but $10.00 beers! That is ridiculous, but peeps pay it. Even the once reasonably prices bars throughout the casinos with the clubs now charge at least $7.00 or more for the same beer...What will the theme of Las Vegas be in the future? We have had the 'cheap', 'family', and now 'club' themes....I am thinking if they went back to the 'cheap' affordable theme...more people will come...but we all know that will never happen again...sigh.
I said it a couple of days ago. This bottle service thing will last about another 6 months to a year. I'm just trying to dance. I can stay at home, turn on my Ipod, drink and sit down whenever the hell I want,
NewBee and jshawaii pretty much nailed it in the first two posts.