Savan Vegas Hotel and Entertainment Complex’s legal saga continues.
This time, Sanum Investments Ltd. and its parent company, Lao Holdings NV, announced that is has filed a petition opposing the “motion to dismiss” that was filed by San Marco Capital Partners LLC. The opposition was filed with the United States District Court in Delaware.
A bit of recap: the Laotian government entered into a joint venture with a consortium consisting of Netherlands-registered Lao Holdings and Macau-based Sanum Investments to run the Savan Vegas. Under the partnership, Lao Holdings owned 80 percent of the casino hotel complex, while the remaining 20 percent was under the control of the Laos government.
The government, however, seized the property in 2012, when it claimed that the operators owed $23 million in back taxes. This led to arbitration proceedings, which were settled in June 2014. The settlement required the two companies to sell their interest in exchange for Laos dropping its tax-dodging and criminal bribery charges.
Now, Lao Holdings and Sanum Investments are alleging claim that San Marco Capital Partners and its president Kelly Gass “failed to uphold their fiduciary obligations.” Lao Holdings claimed San Marco was paid nearly $2 million from Savan Vegas revenues to run and sell the property, but its owner served only the “corrupt and totalitarian” Laos government.
“In contravention of the terms of the investment treaty arbitration, the Laos government unilaterally hired San Marco Capital Partners and Kelly Gass to operate, manage, market and sell Sanum’s valuable Lao gaming assets, which include the Savan Vegas Hotel and Casino and two slot clubs,” said Lao Holdings and Sanum Investments in its Friday press release.
“The defendants, who had no gaming management experience, failed to communicate with the plaintiffs and conduct an open bid process, which would have maximized the sale price of these valuable assets,” they added.
In May, Hong Kong-listed casino services company Macau Legend Development said it has agreed to pay US$42 million for the beleaguered casino property. The deal also includes the right to a 50-year monopoly on casino operations in three provinces of Laos, including the area where the casino complex is located.
But Sanum Investments believes the casino property’s assets are being sold to Macau Legend “for a fraction of the estimated value.”
“The unethical and illegal way that San Marco Capital Partners and Kelly Gass have handled the potential sale of our assets is insulting to any person or company trying to do business in Laos. We hope that the court recognizes this and denies this motion to dismiss,” said Sanum Investments President Jody Jordahl.