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Wednesday, Feb. 16, 2011 | 2:39 p.m.
Eva Longoria Parker and Kim Kardashian at Beso and Eve on Dec. 30, 2009.
Sun Archives
- CityCenter sides with Longoria, Beso against dismissal of bankruptcy case (2-5-2011)
- Legal battle heats up over finances of Eva Longoria’s Beso nightclub at CityCenter (1-12-2011)
- Eva Longoria sued by former partner over Beso nightclub at CityCenter (1-11-2011)
- Eva Longoria’s Beso files bankruptcy to restructure debt (1-6-2011)
Eva Longoria's Beso restaurant and Eve nightclub on the Las Vegas Strip is in worse financial shape than previously reported and faces eviction if it can't get its finances straightened out.
That's according to an attorney for Beso's landlord, the Crystals mall at the CityCenter casino resort complex co-owned by MGM Resorts International.
Beso, which filed for Chapter 11 reorganization Jan. 6, at the time reported it had debt and other liabilities of nearly $5.7 million, including $1.737 million in back rent owed to Crystals.
Crystals' attorney in the case, Nile Leatham of the Las Vegas firm Kolesar & Leatham Chtd., said during a Beso bankruptcy court hearing Wednesday that Beso actually owed some $2.3 million in rent when it filed for bankruptcy.
Wednesday's hearing was called so Bankruptcy Judge Mike Nakagawa could hear arguments from a disgruntled Beso investor, Mali Nachum, that the bankruptcy case should be dismissed because Nachum maintains it was filed in bad faith.
As a backstop position, Nachum's attorneys are asking Nakagawa to at least lift the bankruptcy filing's automatic halt of outside litigation.
That way, Nachum could continue with her state court lawsuit against Beso in which she claims to be owed $400,000 by the business.
CityCenter has sided with Beso in arguing that the bankruptcy court is the best place for Beso to resolve its many financial challenges and Leatham reiterated that support Wednesday.
He said CityCenter had initiated eviction proceedings against Beso before the bankruptcy and remains frustrated at Beso's inability to pay rent.
Besides the Nachum litigation, Beso faces liens from contractors that built the club and restaurant and a largely-unpaid $634,000 judgment from a second former investor, Anthony Vicidomine. He won that judgment to resolve a lawsuit over Beso buying out his investment in the business.
All of these things need to be worked out in bankruptcy court or Beso will be out of business and litigation will continue until everyone involved is worn out, Leatham warned Wednesday.
"There will simply be an eviction. The property will close. Employees will be laid off. Lawsuits will be filed,'' Leatham said.
Beso LLC's attorney, Lenard Schwartzer of Schwartzer & McPherson Law Firm in Las Vegas, noted the business has 150 employees and had nearly $14.6 million in gross income last year.
"There's a real business here to save,'' Schwartzer told Nakagawa. Schwartzer said that besides restructuring its liabilities in bankruptcy court, Beso will seek to recapitalize itself during the bankruptcy process.
Las Vegas attorney Matthew Pawlowski of the firm Callister + Associates, representing Nachum, said the case should be thrown out of bankruptcy court because Longoria and other investors first wrongly removed Nachum from the company and then excluded her as an investor from a meeting where the investors voted to put the company into bankruptcy.
Nakagawa offered no hint on how he would rule, but said he plans to do so on or before March 2. The judge did get Pawlowski to acknowledge the bankruptcy court is as qualified as Clark County District Court to sort out complex business disputes like this one.
The litigation in Clark County District Court -- stayed by the bankruptcy -- focuses on claims Mali Nachum was wrongly removed as Beso's manager in May 2010 and that Beso has failed to pay her some $400,000 she and her husband Ronen had invested in the company.
The Nachums say they got involved with the Las Vegas business after Ronen Nachum in 2006 successfully oversaw construction of Longoria's Beso restaurant in Hollywood.
Attorneys for Longoria, Beso and the co-defendants filed a counterclaim in that case against the Nachums, saying the validity of their ownership interest "is in question because of the existence of irregularities and certain improprieties which may have been committed" in connection with the initial grants of their interests.
The counterclaim says Ronen Nachum was permitted to help oversee the construction of Beso in Las Vegas in early 2009 based on his representation that he was a licensed contractor, though Beso says he has never been so licensed in Nevada.
"Due in large part to Ronen Nachum’s mismanagement of the construction process, Beso LLC was forced to request an additional contribution in the form of a $1 million loan by Longoria," the counterclaim says.
It says Ronen Nachum’s "serial mismanagement" of the construction led to the filing of $1.2 million in construction liens, along with lawsuits and multiple breaches of Beso’s lease with Crystals.
The counterclaim also alleged: "From the outset of their involvement with Beso, the Nachums operated as though they were members of a criminal enterprise rather than investors in a restaurant and nightclub. Although Ronen Nachum was not himself a member of Beso LLC, he nevertheless acted as the de facto owner of Beso through the assistance of Mali Nachum, using his access to engage in a chronic pattern of theft, intimidation and brutal mismanagement of the business.''
In disputing these allegations, attorneys for the Nachums say Beso is the party that has wrongly withheld money from the Nachums by failing to repay them for their loans and investments to the company.
Attorneys for the Nachums also say Beso was "operating at a huge profit margin" while they were managing the restaurant and nightclub.
But after the Nachums were removed from the business in May 2010, the new management "effectively ran the restaurant in to the ground," a Nachum court filing says.
poor eva...
if you need somebody to listen to your problems...
i'm your guy eva...
call me!!!
As expected, the City Center fiasco goes on and on.....
Oh, and buy the way, just who is Eva Longoria? She sure looks like she is having lots of fun.
hey kenny...
lay off of eva...
she's a beautiful lovely girl...
who is going to call me any day to discuss the little speed bumps in her life right now...
everything will be fine eva...
call me!!!
Nice revenues. Sounds like somebody is siphoning off the "profits". I can only guess the principals are getting huge payments. Typical. Everyone gets paid who "needs" to get paid, stiff the landlord and the little guy contractors and close shop. Eva drives off in her Bentley. Touche.
If Beso had a gross income of $14.6 million then why were they not paying their rent. It clear to me that someone was embezzeling the money. Some needs to open a criminal investigation on this business, something just doesn't sound right.
Another stupid club idea that emphasizes VIP over anything else. So much so that there is NOwhere to sit unless it's VIP! C'mon is that what is going to make a successful club these days? How many 20somethings with trust funds can there be?
This one reads embezzelment all over.
Blow them out, evict them and put in a Carls Jr.
Another idiot celebrity that overextended themselves...leave business to the professionals...
Hey greasie Birdie--
another stupid post.
My bet, Judge Nakagawa lets this bankruptcy case go forward and the Nachum's claims get reduced to the equivalent of the sands of the Negev.
$14 million?
Where did all the money go?
Strange doings.
I usually resent it when others make the kinda of post I am about to make, but...
WHO CARES ABOUT BESO??
About half a year ago, I was only half joking when I wondered out loud about how long it would take for homeless squatters to start occupying the inevitable failure that CityCenter will be. The Aria will probably emerge in some future incarnation -- several bankruptcies and reorganizations from now -- as somebody else's property, picked up for about 30 on the dollar. But other properties, the Vdara and the Harmon in particular, are unadulterated failures.
So bring on the homeless squatters! Let them heat tins of baked beans over the stoves left behind by the erstwhile Beso.
Above is supposed to read "30 CENTS on the dollar." The "cent" character didn't show up in final post.
Re-hire the construction workers to take this disaster down!
Ho, Hum. Another "celeb" who thinks because she eats in a restaurant, she can run one successfully. A "name" may draw 'em in the first time, but it takes a lot more than that to bring 'em back. (Aside to TheKash: She a baseball player, I believe.)
I AM GLAD YOU HAD MAYOR GOODWIN AND NOT OUR TOWN
A similar "Joint" at another MGM property tried the same BK/BS and they were unceremoniously evicted. They were also accused of filing BK to avoid paying rent.
Crystals needs to be FILLED for crying out loud! The emptier it is the WORSE it is for those who are paying their rent. Business attracts business. MGM should make some sort of modification in payment for back rent over the coming years and change its rent now to something Beso can afford - having an empty Crystals will do nothing but harm MGM's investment. Short sightedness yet again in the minds of business leaders.
HA! And just over a year ago Jim Murren and Bobby Baldwin were playing grab a$$ with Eva Longoria on NYE when they opened. CityCenter is imploding around all of them as it should and Dubai World wants their money back!
Eva Longoria Is a patheic lounge lizard.
I'm all for progress and change in Las Vegas but CityCenter ruined the look of the Strip. I was in Las Vegas last summer and had lunch at Paris in their sidewalk cafe and one cannot help but notice the huge cold monstrosity that is CityCenter. I gave it the benefit of the doubt and visited the property but have no plans to ever return.
If you are looking for the money, check Eva's closet.
Just another dumb celeb with no business experience. Britney Spears; Jennifer Lopez; etc. Suckered into a money hole by fast talking spenders. Now the property owners are out the rent; employees out of job & no pay; contractors left hanging with liens & judgments wiped out by the BK court.
I can see why celebrities get into financial trouble in spite of the money they make--they invest their money in boondoggles like this. Why can't they just buy AT&T stocks or Van Kampen Bond funds? I wonder how Jaime Pressley ended up owing $700K to the IRS?
samjun23 - you mean like the vegas casion's ????