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Eva Longoria Parker and Kim Kardashian at Beso and Eve on Dec. 30, 2009.
Published Thursday, Jan. 6, 2011 | 6:43 p.m.
Updated Thursday, Jan. 6, 2011 | 8:24 p.m.
The grand opening of Beso restaurant and Eve Nightclub at CityCenter on Dec. 3, 2009.
Eva Longoria's Beso in CityCenter's Crystals.
Beso, the Las Vegas restaurant and nightclub at CityCenter owned by actress Eva Longoria and co-investors, filed for bankruptcy Thursday to restructure nearly $5.7 million in debt and other liabilities.
Beso LLC, 32 percent owned by Longoria, listed assets of about $2.5 million in the Chapter 11 filing in U.S. Bankruptcy Court in Las Vegas.
The restaurant, which has a nightclub called Eve, projected ongoing losses of $76,000 per month.
Court records indicated Beso may be having trouble meeting lease obligations, with the company reporting $1.8 million owed to landlord Crystals at CityCenter.
CityCenter is the resort complex that MGM Resorts International opened in December 2009.
Beso generated nearly $14.6 million in gross income in the past 12 months, the filing said.
Longoria, who has filed for divorce from Tony Parker, apparently has had to provide cash to keep the business afloat. She’s listed as a creditor, owed $375,000 for legal fees paid on behalf of Beso and another $1 million for a cash loan.
Several construction companies are among the creditors, and the filing noted litigation is pending involving contractors involved in the construction of the club as well as former partners.
A June lawsuit filed in Clark County District Court by Ronen and Mali Nachum, investors and purported managers at Beso, alleged they provided the company a $280,000 loan to help fund construction but were later pushed out of the company without payment.
Clark County District Court Judge Mark Denton on Oct. 27 denied a motion by Longoria and co-defendants that the case be dismissed.
Attorneys for Longoria, Beso and the co-defendants then filed a counterclaim 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 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 Ronen Nachum “used threats and intimidation to gain control over the day-to-day operations of Beso with the encouragement of Mali Nachum” and that the Nachums mishandled Beso funds.
Attorneys for the Nachums fired back, denying the allegations and asking in a Dec. 30 filing that $280,000 Ronen Nachum personally deposited into a Beso construction trust account be garnished.
“It would be manifestly unfair for Beso and its agents to terminate their relationship with the Nachums, but use the Nachums’ personal funds to pay for the liens for the construction of Beso,” the filing said.
An earlier lawsuit filed by investor Anthony Vicidomine was settled.
The bankruptcy filing said Vicidomine has been paid $200,000 but is still owed about $651,000 for Beso’s purchase of his interest in the business.
Other litigation disclosed in the bankruptcy filing involves contractors Bombard Electric LLC, Mechanical Insulation Specialists and Perini Building Co.
The company’s assets include nearly $1.9 million in computers, furniture, equipment, restaurant supplies and audio and video gear; and another $172,000 in food and beverage inventory. Some equipment is leased, the filing says.
Besides Longoria’s interest, ownership interests are held by Vicidomine (2 percent), John Torregiani Consulting Inc. (1 percent), Jonas Lowrance (32 percent) and the Nachums’ disputed 32 percent, the filing says. The company is managed by William M. Braden.
A manager at Beso was contacted about the bankruptcy Thursday, but he declined to comment.
Nice , open one year and already $5.7 Mil in the hole.
So she'll get off scott free like every other rich low life? I'm obviously in the wrong business!
Next you will hear "cash flow positive" but they just cannot meet debt obligation. Same ol same ol. Station casinos did the same thing. Claim the business is successful but they just cannot meet debt payments. It's the biggest scam to wipe out your debt and keep the business.
That didn't take long, did it?
Does anyone think this will be the ONLY City Center project to file bankruptcy? I suspect more clubs around town also in time. Just thinking out loud.
what do you expect? a c-rated wanna be actress that wants to try to run on her name...what name?
I am inclined to believe that this Chapter 11 reorganization plan will not be approved and that this Bankruptcy will be converted to a Chapter 7. I just don't see any reorganization, even with 14.6 million in revenue, that can overcome $76,000 a month in ongoing losses. Ms. Langorria may end up losing her shirt on this. Hmmmmm, that might not be too bad.
Nice that the bankruptcy laws, as modified by the GOP (who love us little guys) continue to permit corporations to get rid of debt this way, but not you and me. If you or I declare bankruptcy, we get a delay. We're not off the hook. We still have to pay.
Desperate Housewife, indeed.
And the first domino falls !!
This is another example of an outsider who believes, because she/he ate a hamburger in a restaurant, they can run one successfully. I know. The first time I owned one, I ran it into the ground. Over the next 20-years, my following ventures were far more succesful and, in of all them combined, I never took in close to 14 million! It's not the "big" things that usually do the novice restaurateur in, it's the little things, many of them behind the scenes. It takes experience, not just fame or money, to make a success of any business; the restaurant business being no exception. Additionally, when you don't know the business and rely on others, you may leave yourself open to fraud & embezzlement. Something doesn't smell right here.
There are way too many "high class" clubs and restaurants in Vegas anyway.
I'm sure her name is being used and she has very little involvement in the place,just (hopefully) a monthly check.
All these clubs that rely on celebrities to lure tourists should go out of business.
This story is the epitome of what is wrong with our country. I, in the construction business, continue to work my butt off and make sacrifices in order to pay my bills and a know nothing actress with millions is involved in a bankruptsy that in the end just cost you and me. Very, very, wrong.
They (actors) seriously need to stay away from the business. Especially if they charge 100 bucks a plate.
1.2 mil a month in gross reciepts and they're in the hole $76k every month. Something doesn't pass the smell test. It will be interesting to see how this plays out.
Anytime the Kardashians are involved there will be scum and more scum on the in the deal not to mention Eva is a loser as well.
eva's having a bad year...
leave her alone...
hey eva...
if you need a shoulder to cry on...
i am your guy...
call me!!!
birdie, if you think eva's calling you, you really are dreaming. lol.
First, Eva according to the facts revealed in the article is actually going to lose money on this deal, she loaned money to the business and she probably put up some money as an initial investment. Jerry Fink's description of how to lose money in the restaurant business (of which there are a myriad of different ways) sums it up quite nicely. She could have also benefited immensely from reading Anthony Bourdain's book "Kitchen Confidential" in which he goes on at length and in colorful detail about what goes on in these novice restaurant/bar owner situations. The creditors of this outfit should have done their due diligence and protected themselves by securing the debt, cutting back their credit, putting them on COD, etc. Some creditors and vendors were probably willing to take somewhat of a hit, knowing that this restaurant/bar was probably not going to make it like most others. The smart ones got what business they could while they could and took steps at the end to minimize their exposure.
These entities "conveniently lose money" so they can be can be a tax write-off. Any bank or investor giving money to these so called Celebrity Investors in this economy without a personal garauntee, must have their head examined by a shrink and the Feds. The plan is all too familiar-set up an LLC, incur losses, file for BK and walk away. The banks who lent the money will get bailed out and the tax payers are left holding the bag (to the tune of $13 Trillion! Deficit.)
take a walk give the place away the lawyers will break you get the hell out the las vegas economy is getting worse and it will be a disaster next year give the place away frank----there are no bids
wonder if she is getting rid of assets or hiding monies due to the divorce? humm i wonder???
i ate at beso once. the place is set up weird and the food is extremely bland and pedestrian. great location, but the food is not good and the enviornment is awkward. longoria had only one item on the menu accredited to her at that time (a guacamole dip) which honestly tasted exactly the same as what you buy in the grocery store. for $20 it should be much better -- or just take her name off it. everything about the crystals mall is the same and will fail for the same reason. i know it's not "cool" or "upscale" but if they put a big walmart inside of crystals it would be the biggest non-gaming money maker in las vegas.
It just amazes me that creditors line up to get in on the act of these celebrity restaurants when 90% of them go under or are mismanaged to the point that no one makes money.
Eva is a nobody. She got hooked up with a great show. No different than the runt on 2 1/2 men. Are you lining up to front the next Chuck E Cheese with this kids name on it?
She can make guacamole. Who can't? That's her claim?
The wife and I ate there a few months after it opened. The food was okay, not that bad, not outstanding. I remember the macaroni and cheese was really good. The decor was great.
I did request the manager to turn down the music volume. It was only about 7:00 pm but the music was so loud we had troubling talking at our own table and we're in our early 40's....not 80's.
Part 1:
If a restaurant is not doing enough business to pay its rent, it is destined to fail. If a landlord is unrealistic about the rent its commercial space will generate, based on customer traffic, the tenant will ultimately fail and the vacant space will be an embarrassment.
We walked Crystals, Aria and the Mandarin Oriental at dinner time, mid week, roughly 6 weeks ago and the restaurants had zero to few customers. Inexplicably, a new pastry shop at the complex, with a door right to the Strip sidewalk, had already ceased business. I thought to myself "I see disaster coming". Even if the landlord cuts the rent to close to zero, for the sake of avoiding high end restaurants failing, if few people go in, sit, order and pay the tab, the restaurant will fail anyway.
The P.R. about Crystals which was released by MGM Mirage was that they convinced Ms. Longoria to open a restaurant in their commercial center. Clearly, MGM Mirage was trading on Ms. Longoria's celebrity in order to add luster to their complex's image. As a result, the MGM Mirage's subsidiary which owns Crystals cannot fairly be heard to cry about a deadbeat tenant when it is MGM Mirage which has failed to generate foot traffic and customers for the restaurant they enticed to locate in Crystals.
I read the early litigation pleadings in the lawsuit involving the Nachums, and it appeared that Ms. Longoria initially had a very small percentage ownership in the now bankrupt company. Essentially, she received that small interest for the use of her name. Her increased ownership interest was obtained as, in effect, points for making the $1 Million loan to bail out the now bankrupt entity.
Part 2:
I've now looked at the Chapter 11 Petition online, and to refute some of the comments here: (1) No bank has lent money to this restaurant, (2) Ms. Longoria has not received a dime either as a return on her ownership interest or as interest on her loan, (3) the dissident investor Mr. Vicidomine has received a refund of $851,000, (4) the fractious investor Mr. Nachum has received $222,000 of the debtor's funds, (5) the largest creditor is the landlord, Crystals, at $1.7 Million, and (6) the payroll for 2010 was not inordinate, only $240,000 per month out of $1.2 Million in monthly revenue.
What those numbers tell me is that many commenters here have been slamming Ms. Longoria unfairly, in that she has put substantial money into the restaurant and has taken none out. If there are "bad guys" in this situation it is Crystals' owner, as landlord which has been charging high rent when it knew or should have known (1) that substantial funds from the landlord were required to pay for the unpaid tenant improvements and (2) that a substantial free rent period, after the restaurant opened, would be necessary to establish it as a stable business. Both landlord funding of tenant improvements to the standard of "luxury" this project seemingly requires as well as a long period of free rent are entirely customary in the commercial landlording business. As a result, I repeat the underlying questions about the landlord: Does its senior staff really know how to be a commercial landlord? Have the investors in the landlord (MGM Mirage and Dubai World) being unrealistic about the cost of getting their commercial tenants up and running.
In short, MGM Mirage sought to capitalize on Ms. Longoria's celebrity in promoting City Center, while at the same time its subsidiary Crystals was profoundly unrealistic about paying the costs traditionally borne by a landlord to establish a viable business in a high rent facility.
And no, I don't know Ms. Longoria or her lawyers, and I don't watch Desperate Housewives.
If there was a show called Desperate Landlords or Desperate Casino Operators, I might watch.
Don't restaurants and bars exist so pro-sports men and celebs can lose money?
Running a restaurant/bar usually requires that the owners are involved in the business on a daily basis. Usually celebs/sportsperson thinks the idea is cool, but soon divorce themselves of the day-to-day running. They usually don't see they are spending a $1000 a day on fillet mignon but the restaurant throws half of it away.
In this case, there were problems with this establishment and management behavior that required Longoria to remove certain individuals. If I were her I would get out now and save myself the hassle.
And the City Center businesses start to fall! Just as predicted by numerous posters on this site last year. Who will be next?
I know first hand how being an absentee owner with a restaurant is ignorant. A lot of employees and managers are shameless and will rob you blind. People are too stupid to appreciate having a job these days. They have no pride.
Current US debt is $15 Trillion (take or leave Trillion or Two!) It is accumalating at the rate of $1.3 Trillion a year. To pay if off over 30 years-it will take $1.8 Trillion a year, when the revenue is $2.1 Trillion. What does this have to do with Beso? Inflation will make the next headlines(if it is not creeping in already.)The food costs will go up substantially. The food costs is a big share of overhead in a restaurant even though a restaurant makes lot more money in liquor. This Restaurant, would have probably made it at Cosmopolitan and/or with the right management. Then again, Alex Stratta, at Wynn, is closing its door on Jan.15th. This is not good news for High-End Restaurants.
The key here is for Eva to learn from this financial mistake..She invested $1.3 million thinking she would get a profit, it did not work out for her. Her NBA husband left her knowing full well what was going on here so hopefully he had a pre-nup so he would not get stuck with her bills.
She still has a few years left to get t.v. work with her good looks so she will make up the money.
Most investments do not yield returns, lesson learned you are better off keeping that $1 million sitting in the bank then getting greedy & trying to make it grow & losing it all.
CynicalObserver thanks for taking the time to post some facts. Facts are rare indeed on these pages.
a couple points...
first...
hey cynical...
excellent post...
as always...
second...
hey eva...
call me!!!
Never stop dreamin Birdie, but Eva isn't going to call, sorry to burst your balloon.
C.O.: Thanks for the excellent post and for providing some much needed factual information from the Bankruptcy filing. We seem to agree on the fact that Ms. Longoria is a unsecured creditor of Beso LLC to the tune of 1.375 million dollars, much of which she stands to lose if Beso LLC is liquidated in Bankruptcy. Where I disagree with you is the obligation of Crystals, the subsidiary of MGM Grand to pay unpaid tenant improvements and grant a free rent period. Most landlords will get what they can when they can and if the tenant can't pay they get them out and lease to someone else. It is up to the tenant, here Beso LLC to negotiate a lease with these provisions in it if it can do so. They apparently negotiated a very bad lease. I wonder if they attempted to renegotiate with the landlord after they discovered that they didn't have the volume of business to support the high rent and to pay for the tenant improvements. If Beso LLC is representative of the other tenants of Crystals I can see why perhaps they were not quick to bend over backwards to make concessions to Beso LLC. Crystals may be hard pressed to service it's debt either to its parent MGM or whomever is providing it's financing.