The Cosmopolitan — the Sin City resort whose TV spots promise “just the right amount of wrong” — is all wrong when it comes to running its new nightclub, according to a former business partner.
The mega-resort, which is being sold to buyout giant Blackstone for $1.7 billion, was sued Wednesday by Spiegelworld, the production company hired to manage entertainment at the Cosmo’s swank social club, Rose.Rabbit.Lie.
The firm accuses the Cosmo of a multitude of wrongs that led to their split last month, including sabotaging its “Vegas Nocturne” show, misappropriating club funds and attempting to block the show from moving to a rival venue.
Among the sins, Spiegelworld claims the Cosmo refused to fire a food and beverage contractor whose general manager allegedly squandered club cash at a strip joint, according to the suit filed in Nevada’s Clark County District Court.
Spiegelworld claims the Cosmo ignored its requests to fire the contractor despite concerns over “theft of food and beverage product, sexual harassment, public intoxication and suspected substance abuse.”
The manager also took money set aside for staff expenses “for personal activities including, but not limited to, attending strip clubs in Las Vegas,” the suit claims.
The Cosmo — which emphasized entertainment over gambling — stands out even by Vegas standards for its luxury shopping, big-ticket shows and upscale restaurants.
But like a number of Vegas properties, it ran into trouble during the downturn. Deutsche Bank struck a deal to sell the money-losing resort to Blackstone after foreclosing on the resort’s developer.
Blackstone was not named as a defendant by Spiegelworld.
Spiegelworld claims in its suit that the resort’s problems — at least concerning the nightclub — were self-inflicted.
The hotel bungled the marketing of the club, for example, because the owners were financially motivated to focus on selling the entire resort, the complaint alleges.
“Cosmo rejected almost all of Spiegelworld’s celebrity invitations, slashed the number of invitations allocated to Spiegelworld, and stood by as many of the 500 seats in the theater went unfilled for the official press opening,” according to the suit.
The Cosmo spent a whopping $3.4 million on marketing and public relations for the show only to notch $11,000 in advance ticket sales for opening night, the suit said.
Spiegelworld said management focused on marketing just the Cosmo as opposed to its individual venues, largely because of retention bonuses valued in the millions “in the event the Cosmo was sold to a third-party.”
Spiegelworld is seeking severance payments, insurance and travel costs for employees that it said total more than $500,000.
It also wants the Cosmo to relinquish any rights to the “Vegas Nocturne” show and return Spiegelworld’s costumes, props, sets and staging.
In mid-July, less than seven months after opening the club, the Cosmo abruptly terminated their partnership, Spiegelworld said. The hotel cited “excessive additional funding” as the reason for ending their arrangement but “failed to provide any accounting to support their claim,” the complaint said.
The Cosmo declined to comment on the suit.