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October 1, 2014

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Cosmopolitan fires back at Spiegelworld with $6M countersuit in ‘Vegas Nocturne’ dispute

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Vegas Nocturne” at Rose. Rabbit. Lie. at the Cosmopolitan.

Final Cantos of ‘Vegas Nocturne’

The final cantos of “Vegas Nocturne” at Rose. Rabbit. Lie. on Saturday, July 12, 2014, in the Cosmopolitan of Las Vegas. Launch slideshow »

The Hot List With Emily Ratajkowski at Rose. Rabbit. Lie.

Conde Nast Traveler EVP and Publishing Director Bill Wackermann, Conde Nast Traveler Editor in Chief Pilar Guzman, The Cosmopolitan of Las Vegas CEO John Unwin and Emily Ratajkowski attend the Hot List party at Rose. Rabbit. Lie. on Thursday, May 15, 2014, in the Cosmopolitan of Las Vegas. Launch slideshow »

Nearly a month ago, the Cosmopolitan promised to “vigorously” defend itself against a lawsuit issued by the production company Spiegelworld centering on the closing of the show “Vegas Nocturne.”

The hotel enacted that vigor Friday afternoon, firing back at the company that produced “Vegas Nocturne” at Rose. Rabbit Lie., the Cosmopolitan’s chic social club made up of restaurant, speakeasy and entertainment enclaves.

In a counter-complaint issued in Clark County District Court, the Cosmopolitan’s parent company, Nevada Property 1 LLC, aggressively denied claims by Spiegelworld in its lawsuit against the company on Aug. 4. The countersuit alleges that Spiegelworld and its founder, Ross Mollison, have committed breach of contract and fraud against the show’s host hotel.

In all, the Cosmopolitan specifies a half-dozen claims against Spiegelworld and is seeking more than $6 million in damages — not including punitive awards and legal fees. Cosmopolitan reps are declining comment outside the language of the 39-page complaint drafted by the hotel’s counsel at Snell & Wilmer of Las Vegas.

Mollison said today during a brief phone chat that he would have no comment other than a statement issued late this afternoon by a company spokesman: “The many instances of the Cosmopolitan of Las Vegas’ wrongdoing speak for themselves, and we expect the facts will show just that.”

The document issued by the Cosmopolitan on Friday and unearthed today extensively and pointedly denies Spiegelworld’s allegations that the hotel misappropriated funds or wrongfully held materials (including costumes, props and sets) from the production, violated terms of its contracted agreements with Spiegelworld, or otherwise undercut the prospects for the production’s success.

Spiegelworld initially claimed that “Vegas Nocturne” was an artistic success, but was torpedoed by the hotel’s alleged mismanagement of the production. The Cosmopolitan met those charges in its counterclaim, stating that the show “was so costly that expenses likely never would be justified by the revenues it feasibly could generate.”

The hotel projected first-year losses related to the production at $12 million to $14 million, and verified reports that the social club was indeed losing $1 million per month in its six months of operations. The Cosmopolitan claims that its contribution to the project was “significantly in excess of the contractually required $3 million” the hotel was to invest in the show in the first year of operations.

Denied, too, were Spiegelworld’s claims that the production company’s officials were misled into believing the Blackstone Group (which bought the hotel in June) would funnel more resources into Rose. Rabbit. Lie. and “Vegas Nocturne,” and that the hotel agreed to negotiate for a clean separation of “Vegas Nocturne” from Rose. Rabbit. Lie. That obviously never happened, as instead the hotel informed Spiegelworld on July 3 that the contract between the production company and the hotel would be terminated as of 9 a.m. July 13.

Speaking to the ownership change, the Cosmopolitan counter-complaint states, “The transaction had nothing to do with Rose. Rabbit. Lie. or ‘Vegas Nocturne’ (other than the fact that (Spiegelworld’s) poor operating and marketing of the Social Club was causing substantial operating losses and was equally distressing to current and future ownership as it was to management).”

The hotel answered Spiegelworld’s claims that members of the hotel’s food-and-beverage partner, Ten Palms (a division of Coastal Luxury Management, which operates the restaurant at Rose. Rabbit. Lie.), were often drunk on the job, had committed sexual harassment, pilfered booze and food, and spent company money on such proclivities as trips to adult clubs.

The hotel said it was indeed aware of some “misbehavior” by employees. However, the document further states, the management and supervision of the staff was the responsibility of Mollison’s company, not the hotel.

Addressing the often confused marketing of the social club and accompanying production show, the Cosmopolitan claim states the hotel admits that “the public found the dual branding of Rose. Rabbit. Lie. and ‘Vegas Nocturne’ confusing, (but) allege that was the fault of (Spiegelworld) for insisting upon, developing and attempting to brand ‘Vegas Nocturne’ as a separate, standalone show.”

The countersuit also takes after Mollison for allegedly burning company funds on unauthorized international trips, adding that the self-described "Impresario" often behaved in a counterproductive manner when dealing with Ten Palms reps, which the suit says damaged the partners’ ability to produce a successful joint operation.

The two sides “were expected and contractually required to work together in a professional and businesslike manner, (but) they often failed to do so, almost entirely because of (Mollison’s) secretive, often belligerent and abusive behavior, and that on many occasions (Cosmopolitan representatives) were forced to intervene to convince them to even speak with each other (with Mollison often openly refusing to meet or feigning illness if Ten Palms was in attendance).”

The hotel summarized its allegations by saying the failure of “Vegas Nocturne” was the fault of the production company, Spiegelworld, which it claims “fought tooth and nail” for broad control of operations during the negotiations leading to the development of Rose. Rabbit. Lie.

“Spiegelworld utterly failed in each of these responsibilities,” the complaint unambiguously states. “It has no one to blame but itself.”

Today, Mollison’s three-canto brainchild, a dazzling collection of acrobats, performance artists, comics and musicians, sits dormant. In the company boilerplate, “Vegas Nocturne” is listed as “on hiatus.” Spiegelworld's hit show at Caesars Palace, “Absinthe,” is roaring along, picking up some of the top acts from “Vegas Nocturne” (including tap dancers Sean & John Scott and, for a limited engagement, beat-box musician and songwriter Butterscotch). The show also is branching out to a touring production, with auditions set for this month in Las Vegas.

The Cosmopolitan, too, is moving forward by recruiting entertainers from Las Vegas and elsewhere to perform at Rose. Rabbit. Lie., which remains the only place in town you can enjoy caviar tacos as Skye Dee Miles belts out the standards.

Enjoy the fare and ambiance. Just don’t ask for “Vegas Nocturne.”

Follow John Katsilometes on Twitter at Twitter.com/JohnnyKats. Also, follow “Kats With the Dish” at Twitter.com/KatsWiththeDish.

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