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Tropicana Las Vegas Dragged into Lawsuits Among Investors
and Creditors of the Las Vegas Mob Experience
Attraction at the Resort

Attraction Claims Tropicana Failed in Marketing Obligations

By Steve Green, Las Vegas SunMcClatchy-Tribune Regional News

Aug. 26, 2011--The Tropicana Las Vegas has now been dragged into the legal disputes among investors and creditors of the Las Vegas Mob Experience at the resort.

Jay Bloom, one of the developers of the experience who claims he's been wrongly pushed out of parent company Murder Inc., charged in a counterclaim Thursday in one of the many Mob Experience lawsuits that the attraction is struggling in part because the Tropicana has failed to fully assist in its marketing efforts.

The claim says just 350 people per day were going through the experience through June, well below initial numbers of 700 per day in March.

"Tropicana failed to honor its obligations under its on-property marketing commitments, upon which (investors) relied upon in making the decision to invest millions of dollars in improvements in the Tropicana leasehold," the claim says.

For example, Bloom claims, Tropicana failed to place Mob Experience tent cards in its hotel rooms and didn't advertise the experience on its marquee on Las Vegas Boulevard.

The Tropicana has not yet responded in court to the allegation, and Tropicana officials on Thursday said the property had no immediate comment.

It's likely, however, that the Tropicana has its own beef with the Mob Experience.

That's because contractors that built the experience and say they hadn't been paid $4.5 million, as of Aug. 11, have filed liens against the Tropicana to secure payment of those funds.

"We are aware that these liens constitute an event of default under our credit agreement and we are currently in discussions with our lender for, among other things, the temporary waiver of this event of default," Tropicana said in its second quarter financial report.

Bloom made the allegations about the Tropicana in a counterclaim he filed Thursday in a lawsuit filed against him Aug. 4 in Clark County District Court.

That suit was filed by lenders Vion Operations LLC and Strategic Funding Source Inc. claiming that before his departure from Murder Inc. about July 1, Bloom had looted the company of more than $1 million and that he had misstated the financial condition and prospects for the company in part by submitting inflated visitation projections.

That lawsuit was on top of six lawsuits filed earlier by investors and creditors against Bloom and his companies since 2010, generally alleging bills had gone unpaid or investment agreements weren't honored.

Besides attacking the Tropicana, Bloom attorneys charged in Thursday's counterclaim that Vion Operations LLC, Strategic Funding Source Inc., Strategic Capital Management LLC and two individuals, Louis Ventre and Andrew Reiser, have been scheming against Bloom.

In what has evolved into a lengthy and convoluted he-said, she-said story, the counterclaim alleges these firms and individuals are working to deprive Bloom of his ownership stake in the company and plan to wipe out the positions of Bloom and other investors with a bankruptcy filing.

Ventre worked with Bloom to develop the experience and, following Bloom's departure, has been one of the executives running the experience.

Reiser was involved in a deal in February in which Ventre sold $4 million of Murder Inc.'s future credit card receivables in a factoring transaction, the counterclaim says.

The price was $3.1 million and the buyer was Reiser, one of the Strategic companies and Vion, the counterclaim says.

This was part of $16.5 million procured for development of the Mob Experience, of which Bloom takes credit for $9.5 million and says Ventre was responsible for the other $7 million, the counterclaim says.

"Vion and Strategic filed a frivolous lawsuit (Aug. 4) as part of what appears to be their premeditated scheme, through a preexisting and secret relationship between Reiser and Ventre, to pilfer the Mob Experience and defraud me of my equity as well as each and every one of the company's secured note holders," Bloom said in a statement.

"As owner of the Las Vegas Mob Experience, I offered my own equity interest to help the company raise capital to succeed and placed this escrow in trust to accomplish this goal. It's a frivolous allegation that I somehow looted my own company or conducted fraud by way of misrepresenting attendance numbers provided by third-party experts as a forecast several months prior to opening," Bloom said Thursday.

His counterclaim Thursday also alleged:

--Ventre, Reiser, Strategic Capital and Vion have "pilfered the company in excess of $1 million and continue to loot the company of its revenue on a daily basis."

--The same four parties and Strategic Funding plan to eliminate $13.5 million in debt held by 60 individual note holders -- wiping out the note holders' investments -- "through a planned self-serving bankruptcy" in which they would buy the assets of the business for pennies on the dollar through the bankruptcy process.

"Ventre, Reiser, Strategic Capital, Strategic Funding and/or its partner, Vion, engaged in an elaborate scheme to wrongfully deprive Eagle Group Holdings (a Bloom company) of its ownership interest in Murder Inc. and to further defraud all of the senior secured note holders of the company ahead of Strategic and Vion in priority position," the counterclaim charges.

It goes on to allege "Ventre maintained an undisclosed, preexisting employment relationship with Reiser, Strategic Capital and Strategic Funding" and that "given Strategic's relationship with Vion, Ventre also worked for the benefit of Vion, at the expense of Bloom and the note holders."

The counterclaim includes a defamation count against Ventre, charging he misrepresented to numerous Bloom relationships that "Bloom had taken improper actions in his operation of Murder Inc., Bloom was the subject of criminal actions pending against him and Bloom had been thrown out of his own company, and other such material falsehoods."

As to why Bloom gave up management control of Murder Inc. in July, the lawsuit says he did so at the suggestion of Ventre "in order to procure additional capital and protect the note holders, vendors and the property."

Bloom says in the suit that in July, he provided 95 percent of Eagle Group Holdings' equity in Murder Inc. for use in raising about $5 million in additional capital for the Mob Experience.

But then, he says, a company called GC Global Capital transferred to Vion and one or both of the Strategic companies the escrowed Eagle Group Holdings equity -- but didn't provide funding for which the equity was pledged.

This, Bloom's counterclaim says, was part of an attempt to defraud Eagle Group Holdings of its ownership interest.

GC Global Capital is not a defendant in the counterclaim.

That company, Ventre, Reiser, Strategic Capital, Strategic Funding and Vion have not yet responded to the counterclaim.

The Las Vegas Sun, a sister publication of VEGAS INC, is involved in a cross-promotional agreement with the Mob Experience in which it shares photo and video content in exchange for brand placement.


(c)2011 the Las Vegas Sun (Las Vegas, Nev.)

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