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Best of Liz Benston

Gaming Guru

Liz Benston
 

Retired Casino Manager Sues MGM Mirage

20 September 2005

A retired Circus Circus casino manager has sued MGM Mirage, saying the company terminated retirement benefits owed him by Mandalay Resort Group after MGM Mirage bought out Mandalay.

After the buyout, MGM Mirage reneged on promises Mandalay Resort Group had made through its Supplemental Executive Retirement Plan to pay the retirees an annual retirement benefit for the rest of their lives, according to the suit, filed in Clark County District Court today by Robert Parlanti and his wife, Donna.

Mandalay had promised that if the plan were ever terminated following a change in ownership, retirement benefits would nevertheless be paid according to the employees' distribution election, the suit claims.

MGM Mirage notified retirees in mid-June that their annual payments were going to be cut off as of July 1 and that they would be paid a lump sum for the "actuarial equivalent" of their retirement benefit.

Robert Parlanti retired in September 2002, a decision he said was based in part on a desire to lock in his annual retirement benefit. Instead of an annual payment, the Parlantis said they received a lump sum payment discounted by 6 percent. The Parlantis say MGM Mirage benefited financially from the lump sum payments rather than paying out annual benefits.

MGM Mirage spokesman Alan Feldman said the company was allowed to terminate the annual benefits "as long as people got full and fair value for their plan."

"We hired third-party experts to place full and fair value on this plan and have written checks to every single person in the plan," at a cost of about $100 million, Feldman said. Only a handful of people have not accepted the terms, he said.

"This attorney has put in writing a media relations strategy that suggests we will cave to someone's request for more money," Feldman said. "This attorney is sadly mistaken. We took great care to see that everyone in the plan receive their full and fair compensation."

Parlanti's Los Angeles area attorney Matthew Biren said about 30 employees with the former Mandalay casino properties have retained his services. Biren said he expects to discuss with the court the option of lumping together the plaintiffs in one suit or filing individual lawsuits.

"Retirees are financially devastated and emotionally distraught because they cannot live on the net after tax amounts they realized from the cash out which was forced on them by MGM, the net recoveries being completely inadequate to purchase a lifetime annuity that would provide them with anything close to the same benefit levels they had been receiving," Biren's firm said in a statement.

Retired Casino Manager Sues MGM Mirage is republished from Online.CasinoCity.com.