Lawsuit against Luxor’s CatHouse alleges contract breach

By Steve Green

Monday, Aug. 3, 2009 | 3:36 p.m.

A lawsuit has been filed over a dispute among developers of the CatHouse restaurant and lounge in Las Vegas.

Seth Yudof and his company, Creative Eyes LLC, on Thursday filed suit in Clark County District Court against companies and individuals involved in the CatHouse at the Luxor hotel-casino on the Las Vegas Strip.

The suit asks that the court order an accounting of the finances of the CatHouse and that because of the dispute, a receiver be appointed to preserve the property, capital and assets controlled by the defendants.

The defendants include Heptagon LLC, Heptagon Trading LLC, Heptagon Holdings LLC, Billy Cross, Nick Landazuri and Mick Doohan. Clark County records show Heptagon Trading LLC and Heptagon LLC hold the business licenses for the CatHouse.

Records show Yudof is the managing member of one of the companies he and Creative Eyes are suing -- meaning in essence he is suing a company he has an interest in.

Yudof said Monday the companies would have no comment on the lawsuit he filed against them.

Creative Eyes and Yudof assert claims including breach of contract, fraud and conspiracy related to an alleged consulting agreement between Creative Eyes and one of the CatHouse companies. The 2007 agreement with Heptagon Trading was for creative and entertainment direction for the club, but was later terminated, the suit says.

Creative Eyes says it was to be paid a consulting fee of $100,000 per year and given a 7.5 percent membership interest in Heptagon LLC. The suit says Yudof and Cross were supposed to jointly manage Heptagon LLC.

But without the knowledge of Yudof, Cross in 2008 negotiated a $250,000 loan from the Luxor, the suit charges.

It says that last September, Creative Eyes' biweekly checks were reduced from $3,846 to $2,000 and that Yudof was denied access to the books, records, vendor lists and other documents of Heptagon LLC's operating agreement.

"The defendants have used Yudof's Social Security number and personal information to engage in transactions ... which were not disclosed to plaintiffs," the suit alleges. "The defendants ... even went so far as to change the locks at the CatHouse ... and informed the employees that Yudof was not to be left unsupervised in the venue."

"Plaintiffs have been threatened, intimidated and bullied" by Cross and Landazuri, the suit charges.

The lawsuit says Heptagon Trading LLC's sole purpose was to sublease and operate the CatHouse, obtain loans from Heptagon LLC and enter into all contracts to operate the business. But Heptagon Trading was intentionally undercapitalized to harm creditors and individuals and entities with whom it contracted, the suit alleges.

The complaint says certain members are now attempting to liquidate Heptagon LLC without giving Yudof the right of first refusal to buy their membership shares, even though he has offered to buy out the other interests in the business for $2.4 million.

The Creative Eyes/Yudof complaint also alleges Yudof was assured verbally he would receive ownership interests in other projects including one at MGM Mirage's CityCenter, and that he worked on that project but hasn't been paid by the defendants for that work.