El-Ad, controlled by Israeli billionaire Yitzhak Tshuva, agreed to buy the 34.5-acre site in May for approximately $35 million per acre, which at the time was the highest price ever agreed to for land on the Las Vegas Strip. El-Ad has since announced a partner, Tel Aviv-based IDB Development Corp., and plans for a multibillion redevelopment of the site. The hotel-casino on the site was shuttered earlier this month in advance of the closing of the sale, which is expected to occur before the end of August.
The lawsuit was filed in Clark County district court on June 26 after El-Ad allegedly refused to pay the fee. The litigation has since been moved to federal court. Atwell states in the lawsuit that on or about June 1, 2006, he was contacted by El-Ad's director of development Victor Siguora and its president Mike Naftali, to discuss representation for a possible project in Las Vegas that would be modeled after El-Ad's Plaza Hotel in New York City.
On June 2, the complaint states, "[Atwell] faxed a follow-up letter to El-Ad regarding the June 1 meeting" and, on June 7, "faxed a letter to El-Ad discussing the form of representation and identifying a list of seven possible sites for purchase or joint venture by El-Ad in Las Vegas, including the Frontier."
Also on June 7, "El-Ad outlined its preferred representation terms in an email and stated specifically that if [Atwell] arranges a meeting between El-Ad and the principal of the site [Phil Ruffin, the owner of the Frontier site], El-Ad would enter into an agreement to compensate [Atwell] if a deal is made for the site," according to the complaint, and "Atwell faxed to El-Ad a buyer's broker agreement containing El-Ad's agreed representation terms…including an agreed fee of 1% of the purchase price to be paid to [Atwell] through escrow at the close of a successful transaction."
Over the next several days, Atwell says in the complaint that "at El-Ad's request" he contacted Steve Wynn about a Plaza resort project on Wynn's property and also contacted Edge Resorts about the same project on its "W Resort" property at Harmon and Koval. In between those two events, Atwell says that "at El-Ad's request" he contacted Ruffin regarding its possible purchase of the New Frontier property or some type of joint venture relationship and that "Ruffin showed considerable interest and provided [Atwell] with confidential materials to deliver to El-Ad," which he delivered.
"On or about June 14, 2006, Frontier, by and through its president Bobby Yee, sent a letter to [Atwell] referencing prior discussions and outlining possible terms regarding a deal between El-Ad and the Frontier," according to the complaint. "On or about June 22, 2006, at El-Ad's request, [Atwell] contacted Ruffin and scheduled a meeting between Ruffin and El-Ad on June 29, 2006, at the Plaza Hotel in New York."
The meeting took place, according to the complaint, and nothing else of import happened until Aug. 15, 2006, when "[Atwell] informed El-Ad via fax that discussions had been initiated by [him] with Edge on El-Ad's behalf regarding a possible deal between El-Ad and Edge on the 'W' site." El-Ad replied the same day by telephone, according to the complaint, saying "it had already been introduced to the 'W' site through its investment banker and did not wish for [Atwell] to set up a meeting…because they did not want to have any confusion regarding representation at a later time." Atwell took no further action with regard to the site, according to the complaint.
Five weeks later, on or about Sept. 21, the complaint states that "El-Ad via email confirmed its previous meeting…with Ruffin regarding a potential deal on Frontier" and "also thanked [Atwell] for setting up another meeting in New York with the principal of the former Wet 'n Wild site, Chris Milam, regarding a potential purchase or joint venture of the 27.5-acre site on the Las Vegas Strip," and that "no further action was taken on the Milam site."
On or about Oct. 24, 2006, the complaint states that "El-Ad informed [Atwell] that it was no longer pursuing a Las Vegas project and thanked [Atwell] for its efforts," and that "El-Ad, by and through its director of development, Victor Siguora, at that time also promised that [Atwell] would be protected and would receive its fee if a deal was made between El-Ad and Frontier."
Five months later, on March 14, 2007, the complaint states that "[Atwell] asked by email if [El-Ad] was ready to reconsider a Las Vegas project" and El-Ad did not respond. On March 22, according to the complaint, "a newspaper report stated that El-Ad and Ruffin had reached an agreement for Frontier" and [Atwell] called Ruffin and set up a meeting at the Frontier to discuss [Atwell's] fee and the status of the deal."
At the meeting the following day, according to the complaint, [Atwell informed Ruffin that he has a buyer's broker agreement with El-Ad. Ruffin asked [Atwell] for the least amount [he] would accept for [his] services and offered to assist [Atwell] and to inform El-Ad of the amount requested by [Atwell] at a pre-scheduled Monday, March 26 meeting in New York that has been arranged to iron out the sale details."
On the day of the meeting, the complaint states, Atwell was informed by a news report and then Ruffin "that [Ruffin] had a better deal with another party and had called off the Monday meeting with El-Ad. Ruffin also stated that El-Ad would need to come up with more money if it wanted to make a deal."
On March 27, "Atwell emailed El-Ad stating that a response to a previous email had not been receive and expressed disappointment and upset that El-Ad had re-approached Ruffin without informing [Atwell] and that [Atwell] believed a deal with Ruffin for purchase of Frontier was still possible and [Atwell] was ready and able to assist further," according to the complaint.
The following day, states the complaint, "El-Ad informed [Atwell] via email that 'were and are ready to deal with Ruffin' but Ruffin had apparently had a better deal, so any argument over the broker fee was a moot point."
Six weeks later, on or about May 14, according to the complaint, "El-Ad called [Atwell] and said that [it] had reentered negotiations for Frontier" and "that [it] and Ruffin both believed [Atwell] was owed a fee if a deal for the Frontier was reached. El-Ad also asked [Atwell] to make an offer of the lowest fee for which [he] would settle."
That same day, according to the complaint, "[Atwell] emailed El-Ad a settlement offer for [his] fee" and, two days later, the same day the purchase agreement was announced, "El-Ad, via Victor Siguora, informed [Atwell] that it did not believe [Atwell] was owed a fee and would not negotiate for a fee."
"We did our job, we did it well; We initiated a record breaking sale and we expect to be paid," Atwell tells GlobeSt.com. "I've represented some of the biggest and best in this town over the years and have never been treated like this."
El-Ad has not yet formally responded to the allegations but, in a statement relayed by a spokesperson, El-Ad tells GlobeSt.com that while it "does not normally comment on pending litigation the company wants to make certain facts clear. The company did not engage Mr. Atwell to act as a broker and he did not earn, and is not entitled to, a commission. The company is confident its position will prevail."
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