Tropicana will defer rent owed by cash-strapped Las Vegas Mob Experience

Eager to keep the Las Vegas Mob Experience open for its guests, the Tropicana Las Vegas has agreed to forgo rent for what could be several years as part of a deal for quick sale of the financially tangled attraction.

According to court papers filed in the Chapter 11 bankruptcy of Murder Inc., the Mob Experience's parent company, the attraction will be sold to a company headed by businessman John Vipulis for a total investment of $3.75 million. Vipulis' JVLV Holdings would get majority ownership of the Mob Experience, with some equity for other creditors.

To make the deal work, Tropicana will assess rent on paper equal to 10 percent of sales until the end of 2013, but defer taking it until JVLV has recovered its cash injection. And general contractor M.J. Dean Construction Inc., which has a $4.6 million lien on the Mob Experience for unpaid bills, will share in the rent until it receives $2.5 million.

Once those bills are cleared, Tropicana Las Vegas will collect 20 percent of the sales to make up for back rent and what comes due monthly until the end of the lease that could go as long as 10 years. In addition, the Mob Experience, a combination of Mafia memorabilia in display cases and "interactive entertainment adventure," will give the hotel two free tickets for each amenity package provided to guests.

Principals involved in the deal declined to comment or could not be reached, but in court papers they predicted that a final plan would be ready for judicial review within a week.

A hearing has been set for Monday to seek court permission to cover the payroll and other expenses and to authorize a $375,000 loan from JVLV to keep operations going at a greatly reduced level until the deal closes. The sale is predicated on court approval or a reorganization plan that includes the sale by Jan. 15.

"The (Mob Experience) remains a viable operation," President Louis Ventre, who took over the attraction at midyear, said in court documents. "While the initial projections of income and debt obligations were flawed, the (attraction) can be restructured so that its revenues exceed its operating expenses while providing some repayment to its creditors."

A summary of debt has not been made public, but it exceeds $10 million. By contrast, the mob mementos, valued at less than $1 million, are the major assets.

The original lease, which went into effect on April 1, paid Tropicana 10 percent of sales, with an $83,000 monthly minimum. The Mob Experience paid rent for only two months before defaulting.

Murder Inc. was formed in March 2009 by promoter Jay Bloom, and its financial affairs quickly deteriorated. It also faces nine lawsuits in District Court for Clark County.

Ventre said in court papers that he stepped in "after observing blatant mismanagement by Bloom."

Ventre ticked off a lengthy list of areas where he said Bloom had gone off course. For example, Bloom allegedly told outside financiers that he had pledged 25 percent of the income to investors who had put in $8 million, when the actual numbers had ballooned to 46 percent for $15.4 million.

Ventre said Bloom projected more than 4,100 visitors per day, which Ventre termed physically impossible. The attraction now sells about 150 tickets per day.

Ventre has slashed exhibit space from 25,000 square feet to 11,000, closed interactive sections that included guides playing mobsters, and cut staff by more than 100 people, leaving only 10.

Contact reporter Tim O'Reiley at toreiley@reviewjournal.com or 702-387-5290.