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Friday, September 22, 2000
Copyright © Las Vegas Review-Journal

Settlement to forbid C2K nightclub operators' return

By JEFF SIMPSON
lasvegas.com Gaming Wire

The operators of The Venetian's closed C2K nightclub will receive a financial settlement in exchange for an agreement that they no longer will be involved in the club if it ever reopens under new management, informed sources said Thursday.

Venetian lawyer J. Stephen Peek and C2K lawyer John Curtas confirmed that a tentative agreement had been reached.

As a result, today's scheduled resumption of their court case has been canceled, the lawyers said.

If the deal is finalized, the lawyers said the lawsuit would be withdrawn.

Neither Peek nor Curtas was willing to discuss details of the tentative settlement.

"One thing is certain," Peek said earlier in the week, "C2K will not reopen with its former operators involved."

The tentative agreement was reached earlier this week, and businessmen from both sides made the deal without their lawyers present, a source said.

"(The operators of C2K) are going to get a healthy amount of cash to go away and leave the nightclub," the source said. "They'll get millions to walk away -- more than $1 million and less than $10 million."

A prohibition against discussion of the allegations against C2K's operators would be a part of the deal, the source said.

The Venetian closed the nightclub Aug. 30, alleging drug use leading to overdoses, fights and other violence.

C2K operator Silver Hammer of Nevada LLC filed suit in District Court the next day, seeking an injunction that would force The Venetian to allow them to reopen.

Hearings in the case began last week and were highlighted by allegations of gratuitous sex and the rampant use of the hallucinogenic drug Ecstasy at C2K.

After undercover Las Vegas police officer Todd Raybuck testified in District Judge Stephen Huffaker's chambers Sept. 14, lawyers for the resort and C2K agreed to try to settle their dispute.

According to C2K's lawsuit, H&H of Nevada LLC entered into a master lease with The Venetian in June 1997 and obtained commercial rights for 20 years for 50,000 square feet of the resort's property.

The agreement stipulated H&H, which later subleased the property to Silver Hammer, would operate a nightclub within the space.

On July 6, The Venetian sent a letter of default to H&H and Silver Hammer, citing the overdoses and security problems as reasons for the move.

A 21-year-old Henderson woman died of an Ecstasy overdose July 20, according to a coroner's report; her father said she became ill at C2K after taking one or two Ecstasy pills.

Ecstasy, also known as meÂthylenedioxymethamphetÂamine or MDMA, is a synthetic, mind-altering stimulant often used by all-night partygoers. The immediate side effects of Ecstasy can include increases in body temperature, heart rate and blood pressure.

Raybuck's testimony included allegations that an undercover police operation at the C2K nightclub was able to purchase drugs inside the club, and more people were under the influence of Ecstasy at C2K than at any other Las Vegas dance club.

The financial settlement to be given to Silver Hammer will apparently be paid by H&H, although a source could not confirm where the money would come from.

H&H lawyer Bruce Leslie was unavailable for comment Thursday.

The Venetian owns the C2K name, and can maintain the space's moniker, said Silver Hammer lawyer Curtas.

The Venetian's Peek said he didn't know what will ultimately happen with the club's space, but noted that H&H still has an interim agreement to lease it when Silver Hammer departs.

"It's an 'at-will' agreement," Peek said. "It can be canceled by either party on a day-to-day basis."

He quickly added: "Will there be an entertainment venue in The Venetian? The answer is yes."