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Arnold M. Knightly

Privé Las Vegas files for bankruptcy

13 November 2009

LAS VEGAS, Nevada -- The cost of recent legal troubles has forced embattled nightclub owner Privé Las Vegas to file for Chapter 11 bankruptcy protection.

The Miami-based company owns the Privé and its sister ultralounge, The Living Room, at Planet Hollywood Resort. The filing was made in the U.S. Bankruptcy Court in the Southern District of Florida on Wednesday.

Privé Las Vegas listed less than $50,000 in assets against $1 million to $10 million in liabilities, according to court filings.

The list of top unsecured creditors include $2.6 million to Miami-based Vegas Nightclub Partners, $1.6 million to ADT Construction, and $1.6 million to William Richardson of Las Vegas.

Privé principal owner Roman Jones said in a text message that the clubs will remain open. He didn't comment further.

Bankruptcy Judge A. Jay Cristol approved an emergency motion Thursday allowing the clubs to continue paying wages and benefits to 100 employees and 14 independent contractors. A Chapter 11 bankruptcy allows a business to negotiate with its creditors while remaining open for business.

The nightclubs are operating under a 90-day liquor license while Las Vegas police continue background checks on the new owners and management team.

The club was shut down by the county in late July after its liquor license was revoked because the resort and club were found to be failing to "abide by the duties of a liquor licensee." Privé reopened four weeks later under a 30-day license after the new owners were in place.

The clubs were cited for three violations in 2008 by Clark County Business License Department. Violations included allowing topless and lewd activity to take place on site.

Privé has agreed to reimburse Planet Hollywood $375,000 of a $500,000 fine that was issued by casino regulators, who said the resort did not "maintain sufficient control over" the nightclub.

The bankruptcy filings list $690,000 in claims owed to Planet Hollywood Resort. Calls to Planet Hollywood and Clark County officials were not returned by deadline.