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Arnold M. Knightly
 

Elad Group settles lawsuit over unpaid broker fees

12 September 2008

LAS VEGAS, Nevada -- The owners of the New Frontier site on Wednesday settled a multimillion-dollar lawsuit involving the property's sale just a day before they went to court for a trademark dispute over the company's proposed name for a new resort on the property.

New York-based Elad Group on Wednesday settled a lawsuit brought by local real estate broker David Atwell for an undisclosed amount.

Atwell filed a $12 million lawsuit in July 2007, claiming he was owed fees for helping initiate the $1.2 billion sale of the New Frontier.

Atwell's lawsuit claims Elad agreed to pay him 1 percent of the sales price as a fee for serving as the company's broker.

Atwell could not discuss the settlement's details because of a confidentiality clause. However, he said he was satisfied with the outcome and was happy to be linked to the most valuable land deal to date on the Strip.

Atwell's lawsuit, filed through his company, Resort Properties of America, contended Elad spent nearly a year evaluating possible land purchases and partnerships, guided by Resort Properties.

Elad agreed to buy the 34-acre New Frontier property from owner Phil Ruffin in May 2007 for nearly $35 million an acre.

The development group, controlled by Israeli billionaire Yitzhak Tshuva, closed the hotel-casino in July 2007 and imploded the property in November.

Elad's plans to build a $6 billion resort modeled after the Plaza in New York, which it owns, were put on hold this summer by the tightening credit market.

Atwell, a 30-year veteran of the Strip real estate market, was involved in the 1988 sale of the 168-acre Dunes hotel and country club to Japanese businessman Masao Nangaku for $157.5 million, then a record.

The land is now the site of the Bellagio and MGM Mirage's CityCenter.

Atwell said he decided to settle his lawsuit against Elad despite friends' advice, because, "I don't like being at odds with people.

"I would like to do business in the future with Elad," he said. "I have a few ideas in mind around the Strip. They're a major player."

Tamares Group, the owners of the Plaza downtown, however, doesn't appear ready to settle with Elad.

Tamares and Elad are fighting over the Plaza name.

Elad claims it holds national trademark rights on the Plaza name dating back to 1906.

Tamares says it holds trademark rights to the name for the state of Nevada.

Elad attorneys on Thursday maintained that the development group was unaware of the downtown property when it began promoting its own project to investors and the media.

Jury selection in the trademark dispute began Thursday afternoon and is expected to be completed today.

The trademark trial, which is being heard in front of Judge Elizabeth Gonzalez, could last until early October.