Attorneys representing a tourist left paralyzed after he was beaten at the Crazy Horse Too claim strip club owner Rick Rizzolo hid his assets to avoid honoring an agreement to pay the man $10 million.
A federal court judge granted Kirk Henry’s request to force Rizzolo to produce financial documents, including checks, billing invoices, payment records, engagement letters and transmittal sheets, according to court records.
U.S. District Judge George Foley gave Rizzolo until Jan. 8 to submit the paperwork to the court.
Henry claims Rizzolo divorced his wife, Lisa, in 2005 and transferred all of his assets to her in order to dodge paying Henry.
“(Rizzolo) conspired to defraud plaintiffs from collecting on their claim by concealing and alienating the ownership of their assets, in part, through a collusive June 2005 divorce decree,” according to a motion filed by Henry’s attorneys.
Henry was left a quadriplegic after an argument over an $80 bar tab at the Crazy Horse. Associates of Rizzolo allegedly followed him out of the club and beat him, breaking Henry’s neck. Henry and his wife, Amy, filed a lawsuit in 2001.
In 2006, Rizzolo pleaded guilty to tax evasion and was sentenced to one year and one day in prison.
That same year, the two sides struck a deal that directed Rizzolo to immediately pay Henry $1 million and the balance when his club sold. But the club failed to sell and its value plummeted after the Las Vegas City Council stripped it of its liquor license.
Henry’s attorneys claim Rizzolo handed over everything but the club to his wife. They said Rizzolo held onto Crazy Horse because he knew the government would ultimately seize it. Still, Henry’s lawyers said Rizzolo is obligated to pay the $9 million, even if it doesn’t come from the sale of the club.
Henry’s motion filed earlier this month states that in arguing to withhold the relevant documents, Rizzolo’s attorneys never asserted the attorney-client privilege, which could have protected Rizzolo from having to turn over the documents, according to court records.
Foley agreed, saying the former strip club owner’s lawyers “waived its and its clients’ privilege objections to the subpoena by failing to assert objections in a timely manner and by failing to support its belated objections by appropriate privilege logs or other affidavits.”
Henry’s attorneys claim the records will show that Rizzolo conspired to defraud the Henrys by filing for divorce and shuffling his assets around.
Rizzolo, who is represented by Patti, Sgro & Lewis, contends that he and his wife filed for a legitimate divorce and because they were married shortly after graduating from high school, they split everything 50-50. The attorneys also scoffed at the notion the couple conspired against the Henrys, saying the divorce was finalized a year before Rizzolo and Henry entered into the agreement.
In a court filing, Rizzolo’s attorneys said Rizzolo has turned over all of his tax returns and other financial documents in his possession.
“Objections to the discovery were not waived and responses were timely served,” Rizzolo’s attorneys claimed in court filings.
“Plaintiffs’ interrogatories and their request for documents were served by e-mail and regular U.S. mail.”
They also argued that the deal was that he would pay the Henrys from the sale of the club.
“They entered into a settlement agreement to be paid from the sale of a lucrative business and their entitlement to money has been thwarted by their friends in the government; not by the Defendants herein,” the filing states.
Rizzolo has claimed the government failed to sell the club when it was worth between $29 million and $36 million. During the delay to sell the club, the city stripped it of the license that made it valuable.
“Plaintiffs, without a civil judgment for money, are on an expedition to find money that was long ago spent,” Rizzolo’s attorneys argued.
Contact reporter Adrienne Packer at firstname.lastname@example.org or 702-384-8710.