Eva Longoria celebrated her birthday with a red carpet full of celebrities at Eve and Beso inside Crystals at CityCenter on March 18, 2011.
Dissident investors in actress Eva Longoria’s Beso restaurant in Las Vegas are challenging the Beso sales plan – and say they may make a competing bid for the business.
Under plans disclosed last month, restaurant and casino operator Landry’s Restaurants of Houston has agreed to buy the Beso LLC assets out of bankruptcy for $1 million. A hearing is set for next week on the plan.
Longoria would hold a 30 percent stake in an entity that will use the assets, which include the open restaurant and the closed Eve nightclub. Beso is at the Crystals luxury mall at CityCenter, an MGM Resorts International development on the Las Vegas Strip.
Existing creditors and investors under this plan face steep losses, as Beso's liabilities were listed as $5.68 million in its bankruptcy filing.
Wife/husband investors and creditors Mali Nachum and Ronen Nachum, who have been litigating against Longoria in multiple courts, on Tuesday filed an objection based on "apparent self-dealing" to the Landry’s/Longoria asset sale plan.
"This creditor is interested in purchasing the assets of the debtor, but is unable to obtain/review the applicable documents regarding the full financial dealings of this debtor," the Nachums’ filing said, adding the couple want to meet with landlord Crystals about a potential offer but can’t make an offer until they review the books.
Their Las Vegas attorney, Brian Shapiro, questioned whether the sales plan is in the best interest of the Beso bankruptcy estate since it involved negotiations that included William Braden of San Antonio, Longoria’s accountant who managed Beso until Landry's stepped in on an emergency basis last month to keep the restaurant open pending its sale.
"On Aug. 30, the deposition of Eva Longoria was taken. At that deposition, Ms. Longoria testified that her personal team of processionals, including Mr. Braden, assisted in the negotiation of the sale for her," the Nachums’ filing said.
"The creditors query as to whom was representing the bankruptcy estate? If Mr. Braden was representing Ms. Longoria, then who negotiated the sale and whom marketed the business to applicable third parties?," the Nachums’ filing said.
The Nachums noted Landry’s has agreed to indemnify Longoria against lawsuits filed by the Nachums – but "there is no evidence presented as to how the sale was negotiated and what consideration was given by Ms. Longoria to the estate for entering into the indemnification agreement."
"Moreover, the sale contemplates the sale to the purchaser of any and all claims against other persons relating to the business or the assets. The claims and such value are not disclosed. The creditors are concerned that the estate may be selling claims against Longoria and Braden for self-dealing and breach of fiduciary duty," the Nachums’ filing said.
While the Nachums have regularly agitated against Longoria and Beso investors allied with her, Longoria has what may be insurmountable advantages in the bankruptcy sale.
One is the backing of Crystals, which has allowed her high-profile restaurant to continue operating despite defaulting on its lease obligations. At last report, it was some $3.575 million behind on rent.
Another advantage is that Landry’s, considered to have deep pockets and known as a successful restaurant operator, also has the support of Crystals. And Landry’s has made it clear it wants nothing to do with Beso unless Longoria is involved.
The Nachums claim to be owed $710,000 after investing in, loaning money to and managing Beso. They claim to have been wrongfully pushed out of the company in 2010.
Attorneys for Beso have countered with allegations that Ronen Nachum may have mismanaged and skimmed cash from the business – charges denied by his attorneys.
Beso through July had lost $894,000 since filing for bankruptcy Jan. 6.
The property has struggled even after generating revenue of nearly $14.6 million in 2010 – but Landry’s is confident of turning it around thanks to its management expertise and pricing power with vendors.