New Documents Filed by Blumenthal, Nordrehaug & Bhowmik Alleging MGM Defrauded Investors Out of Millions – Los Angeles Employment Law Attorneys Blumenthal, Nordrehaug & Bhowmik

by Norman B. Blumenthal on July 15, 2013

welcome to Las Vegas signBlumenthal, Nordrehaug & Bhowmik and Gerard & Associates have filed an emergency motion alleging that MGM Resorts International defrauded its investors.  KJH & RDA Investor Group, LLC v. Turnberry/MGM Grand Towers, LLC, Case No. A547024.  According to the motion filed in the Nevada Supreme Court, MGM used a sales force to lure investors to purchase units in the MGM Signature Suites at the MGM Grand in Las Vegas

In new documents filed with the motion, Blumenthal, Nordrehaug & Bhowmik asserted that the employed sales force were given scripts by MGM that built up the positive cash flow that would be generated from the high-end clientele under the MGM Rental Program of these MGM Signature units as luxury units.  Specifically, MGM allegedly represented to potential buyers that the "luxury" units would "demand rental rates comparable to the highest end luxury units in Las Vegas such as the Four Seasons and Bellagio which rent from $200 to $500 per night."  The new documents also alleged that MGM defrauded investors by making them believe they would be entitled to a 60% share of the revenues under the MGM Rental Program when allegedly MGM knew the owners’ share of revenues under the MGM Rental Program was only a 30% share.  Also, that MGM allegedly promised investors that the condominium property would be operated under “democratic principles” only to later discover the condominium property was being operated as an “autocracy.”

“Essentially, MGM allegedly misrepresented the target market, ambience, revenue split, rental rate, and operating principles,” said Norman Blumenthal, founding partner of Blumenthal, Nordrehaug & Bhowmik.  “MGM’s target market was not the high-end clientele promoted, but actually a young, raucous crowd who would pay no more than $99 or less per night.”  As a result of the alleged fraud, investors lost their property through foreclosure or a short sale, while MGM reaped “hundreds of millions of dollars from their fraudulent scheme."

Blumenthal, Nordrehaug & Bhowmik, at (310) 981-3918, is a California employment law firm with offices located in San Diego, San Francisco and Los Angeles. The firm dedicates its practice to contingency fee employment law work for issues involving misclassification as a salaried worker exempt from overtime, failure to pay vacation wages, misclassification as an independent contractor, off-the-clock work, wrongful termination, discrimination and other California labor laws.

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