Vestin looking to void ruling

Hard-money lender Vestin Group says it hopes to persuade a Clark County district judge to void a $4.9 million judgment for breach of lease on a two-story Las Vegas office building.

District Judge Elissa Cadish entered a summary judgment against Vestin Group in April, but a spokesman said in an e-mail that the company hopes a judge will "set aside the errant judgment" after a June 28 hearing.

"We won't need to appeal if the judge agrees with us," the company said.

The lawsuit deals with an office building at 8379 W. Sunset Road that Mike Shustek's Vestin Group occupied starting in 2003, according to the judgment. Vestin originally leased space from Luke Properties, which sold the building to Vestin Fund III, an affiliate of Vestin Group, the following year.

In 2006, Vestin Fund III sold the property to Paul Birkeland and Joyce Birkeland for $14.3 million, the order said. Vestin Group agreed to pay rents to the Birkelands, who later assigned their interests to two limited liability companies, Birkeland Family LLC III and Birkeland Family LLC V, the court papers explain.

Vestin Group paid $860,000 yearly under the lease, plus property taxes and operating expenses.

Vestin Group vacated the building in 2008 and a Vestin Group attorney notified a Birkeland attorney that Vestin Group would no longer pay rent on the office space, according to the judgment.

Judge Cadish found that Vestin Group breached the lease and signed a judgment for $4.9 million on behalf of the building owners.

Vestin Fund III, a company that made commercial loans and invested in income-producing real estate, had provided a $700,000 letter of credit to Birkeland, which reduced the damages.

The $4.3 million-asset fund is being liquidated for the benefit of investors.

Vestin Group, which has Shustek as its sole owner, owes the $4.2 million balance on the judgment.

Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.