Eva Longoria’s Beso moves forward amid bankruptcy

By Steve Green

Monday, April 4, 2011 | 1:50 a.m.

Eva Longoria's Beso restaurant and Eve nightclub in Las Vegas appears to be running at about a breakeven pace while in bankruptcy -- and it's making progress on getting some creditors paid.

Records filed last week show that through February, Beso LLC had lost about $137,000 since filing for bankruptcy Jan. 6.

During this period, gross revenue totaled $1.69 million.

Numbers for March haven't yet been reported, but the property was projected to turn a profit of $113,000 on $1 million of gross revenue in March. If that holds true, the March profit would negate much of the money lost through February.

The bankruptcy case hasn't advanced to the point of Beso filing a reorganization plan.

But a hearing is set this month on a motion by contractors that the bankruptcy court approve a settlement in which they would be paid $765,000 in compromise of their $1.3 million in remaining claims from construction of the premises.

Under the settlement, Beso would not pursue a long list of alleged construction and machinery defects it filed in court, except for warranty claims.

Those alleged defects include plumbing leaks and problems with drains that caused floods, electronic components failing in restroom flushing mechanisms and problems with water heaters, shelving, ranges and ovens, wine towers, an ice machine, a glass washing machine, beer coolers, air conditioners and electrical outlets.

In court papers, the contractors and attorneys for Beso said the settlement is favorable since it doesn't involve funds held by Beso.

Some $368,000 as a tenant improvement allowance would be paid by Crystals, the shopping center where Beso and Eve are located. Crystals is part of MGM Resorts International's CityCenter casino-resort complex on the Las Vegas Strip. Another $397,000 would be paid from Beso's construction control account.

Attorneys for Mali Nachum, an investor in Beso who has been litigating against Beso and Longoria, oppose this settlement.

Nachum's husband Ronen has filed a $280,000 claim in the bankruptcy case against Beso -- money he said he loaned to Beso so its $3.7 million construction budget could be fully funded as required.

The $397,000 in the Beso construction control account includes the $280,000 owed to the Nachums, and that $280,000 must be returned to the Nachums as opposed to providing it to the contractors, the Nachums' attorneys said in their opposition.

"Beso LLC and its representatives have apparently seen fit to settle its own debts with other people's money," the opposition said.

"This is particularly troubling, because Beso LLC used LLC funds for what were declared $1 million in renovations in December 2010, while failing to pay said funds to the contractors at issue who have been awaiting payment," said the opposition filed by attorneys with the law firm Callister + Associates LLC.

But Lenard Schwartzer, attorney for Beso, said the funds held by Valley Construction Services are not part of the bankruptcy estate. Rather, the funds are held in trust for subcontractors, he said in court papers.

"The Nachums, based on Mali Nachum's sworn statement, have no interest in the funds at Valley Construction Services because the funds were 'loaned' to Beso," Schwartzer wrote in a court declaration.

He added that Beso may later argue that funds the Nachums provided for construction were a capital contribution and not a loan.

Bankruptcy Judge Mike Nakagawa on March 2 denied a motion by Mali Nachum that Beso's bankruptcy petition be dismissed.

Mali Nachum's attorneys argued the bankruptcy was filed in bad faith, but Nakagawa wrote in his order there was an "utter failure to offer evidence to support her allegations."

Nakagawa also denied Nachum's motion to lift the automatic stay of litigation she wanted to pursue in state court against Beso over claims she was wrongly removed from the company.

However, her attorneys have now asked the court for permission to continue her lawsuit against non-debtor parties Longoria and Beso investor Jonas Lowrance.

Schwartzer said in court papers he does not oppose that motion, as long as the litigation does not involve the disputed money in the construction control account.

Mali Nachum and Ronen Nachum say in that state court lawsuit -- filed in June 2010 in Clark County District Court -- that Ronen Nachum in 2006 oversaw the construction in Hollywood of the Beso restaurant there.

The suit says Ronen Nachum was invited to supervise construction of the Las Vegas Beso and that the Nachums' received 21 percent ownership in the Las Vegas business as part of the deal. Longoria received 9 percent for marketing and publicity services and other investors owned the rest, the suit says.

Later, Ronen transferred his interest to his wife, Mali, and by one interpretation her ownership percentage reached 44 percent, the suit said. Beso in its bankruptcy filing said she has a "disputed" 32 percent stake.

After the opening of Beso and Eve on time in December 2009, the director of operations resigned and the operation of Beso and Eve was assumed by Lowrance and the Nachums, their suit said.

Later, the lawsuit says, an email from the staff was sent to Longoria falsely insinuating Ronen Nachum was stealing cash from the company and claiming he was acting as a tyrant, the Nachums' lawsuit said.

Lowrance then gained a court order barring the Nachums from entering the business, it was presented to them on May 5, 2010, and six "large men" surrounded the Nachums and escorted them from the premises, the lawsuit said.

The suit asserted counts of conspiracy, breach of contract, abuse of process, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, unjust enrichment, assault and false imprisonment.

Before the bankruptcy put the lawsuit on hold, the defendants denied the allegations and hit the Nachums with a counterclaim.

Crystals, in the meantime, has received rental payments from Beso of about $159,000 since the bankruptcy filing, records indicate.

An attorney for Crystals, in arguing against dismissal of the bankruptcy case during a February hearing, said Beso owed some $2.3 million in rent when it filed for bankruptcy and faced eviction if it was unable to straighten out its finances through the bankruptcy process.

Beso filed for bankruptcy reorganization on Jan. 6 in U.S. Bankruptcy Court in Las Vegas, listing assets of $2.5 million against $5.7 million in debt and other liabilities.

Beso at the time said it was 32 percent owned by Longoria.