Strip club sale stalled as investors drop bids
As the saga of money, power and topless women drags on, interested parties are getting nervous about getting their cut of the Crazy Horse Too Gentlemen’s Club.
The club is likely to close once again on Sunday, lowering the strip joint’s value to what some observers believe will be below the amount of fines and liens levied against Rick Rizzolo and his business.
Lawyers for Kirk Henry, a Kansas tourist whose neck was broken over an $80 tab outside the club, sought a judgment against Rizzolo on Friday in order to get the $9 million plus interest Henry still is owed.
"I think it’s fairly apparent now that this whole thing has been a scam," attorney Don Campbell said. He argued that he needs to look at Rizzolo’s assets, since the imprisoned businessman is now saying he is broke.
"I need to take some examination," he said. "There’s no vehicle here, when he’s saying, ‘I don’t have any money,’ by which …"
District Court Judge Jackie Glass interrupted.
"Stop, stop, please. I did not draft the settlement agreement," she said, obviously annoyed. "You have to wait for the sale of this business."
The settlement agreement clearly states that Henry doesn’t get the rest of his payment until the club is sold, she said.
"Perhaps everybody should’ve anticipated that at the time the agreement was entered into," she said.
Henry, who is a quadriplegic, has been paid $1 million from Rizzolo’s insurance.
Under a plea agreement last year, Rizzolo and his company, The Power Co. agreed to pay $17 million in fines when the club was sold. Since then, more liens have been added to the property.
The latest potential buyer, Mike Signorelli, failed to make good on his offer of $45 million. Signorelli has been operating the club since October.
Las Vegas business licensing staff expect to go into the club in the wee hours Sunday and pull Signorelli’s liquor license. The license was conditioned on the fact Signorelli would buy the club by June 30.
Rizzolo’s lawyers Friday said they are talking with federal officials about finding a mutually agreed-upon third party to manage the club until it is sold.
"We have every intent of paying the money that is owed," said Dan Carvalho, a lawyer for Rizzolo.
Mark Hafer, another attorney for Rizzolo, said there have been "several meetings already" with federal officials.
Natalie Collins, a spokeswoman for the U.S. Attorney’s office, said she could not comment on ongoing negotiations.
Tommy Karas, a nightclub operator, said he had an agreement to purchase the club for $38 million.
"I think it’s worth that today; I won’t think it is tomorrow," said Karas. "Once it’s shut down, it’s worthless. Sitting on land, that’s all it is."
He put the value of the club at $15 million if it goes on the auction block.
Luke Brugnara, a San Francisco investor, also said he had an agreement to buy the club for "north of $30 million."
He said a lot of the Crazy Horse Too’s value came with the management that had been in place, and the quality of the "girls" that danced there. He said the caliber of those ladies has declined.
He pointed to Signorelli’s recent testimony before the City Council that the club was losing money.
"Right now, the value of the Crazy Horse is the land," he said. He put the value at $7 million or $8 million.
It was unclear if Henry, or the federal government, would be able to recoup the agreed-upon fines if the club sells for less than had been expected.
Both Campbell and Rizzolo’s attorney have blamed the city revoking Rizzolo’s liquor license for the stalled sale. Glass’s husband, Steve Wolfson, sits on the Las Vegas City Council.
Any new operator or owner of the club, even one agreed to by the federal government, would need the approval of the Las Vegas City Council for a liquor license.
