Casino Execs Lawsuit Against The Drew Las Vegas Developer Alleges Fraud
Posted on: June 26, 2020, 07:34h.
Last updated on: June 26, 2020, 10:21h.
A group of high-level casino executives is suing developers of The Drew Las Vegas for breach of contract and fraud.
The five plaintiffs in the case claim they were headhunted to join The Drew team, but were dumped after construction was halted on the project in mid-March.
Paul Berry, Robert Mancari, Farid Matraki, Michael Tozzi, and Michael Peltyn say they were lured to The Drew project with promises of six-figure salaries, guaranteed bonuses, and generous severance packages, according to the lawsuit.
Instead, they were all laid off between March 31 and April 7 after receiving separation agreements requiring them to waive all claims against the developer in return for just two months’ pay.
Their contracts, however, contain clauses stating that should their employment be terminated for any reason other than for being fired for cause, they would be paid the balance of their salaries and bonuses for the remainder of their contracts, which, in most cases, was four years from the date they were signed.
Poached Then Fried
The suit names developer the Witkoff Group; its chairman and CEO, Steve Witkoff; his son, Alex Witkoff; and the former MGM executive and world champion poker player Bobby Baldwin, who was hired as The Drew CEO late last year, among others.
Baldwin previously worked with each of the five executives and had been instrumental in their recruitment. Tozzi and Peltyn were poached from their positions at Genting’s Resorts World, another multi-billion project under construction across the Strip.
The lawsuit, which Witkoff Group lawyers told the Las Vegas Review-Journal is “without merit,” will add fuel to rumors first reported by Vital Vegas in mid-April. Those stated that financing for the project had fallen through due to the financial pressures of the coronavirus pandemic.
Shaky Financial Foundation?
Witkoff told Nevada regulators in January that he expected to finalize a $2 billion construction loan in late February or early March.
The lawsuit claims the five executives were assured on several occasions that developers had secured full financing for the project.
But according to papers filed in Clark Country last week, contractors involved in The Drew’s construction claim they’re owed more than $36 million in unpaid bills.
Meanwhile, Business Korea reported that a group of South Korean investors — including Hyundai and the country’s state-owned casino, Kwangon Land — had not received principal and interest payments on investments totaling $490 million.
The Drew project is a redevelopment of the unfinished Fontainebleau, which went bankrupt during construction at the height of the last recession when Bank of America pulled its financial backing.
The Witkoff Group said in a statement last week that it was “committed” to the project and “confident” of its completion.
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