Warehouse official thought to sell CityCenter defect-case papers to shredder

The sprawling legal battle over construction defects at CityCenter has taken a bizarre turn as attorneys have discovered that a warehouse manager allegedly sold more than 500 boxes of evidence to a shredder.

John Foust, an attorney representing CityCenter, informed Clark County District Court Judge Elizabeth Gonzalez in a Feb. 23 letter that many of the records had electronic backups, but he did not know how many might be lost for good. The warehouse, just east of the Strip, contained 1,202 boxes deposited either by CityCenter developer and half-owner MGM Resorts International or by contractor Desert Mechanical, by the agreement of all attorneys in the case.

As a result of the blunder, the lawyer's document committee decided Wednesday to fire the Litigation Document Group, which was in charge of the boxes' security and management, and seek a new vendor.

Litigation Document President Craig Renard reported that a manager who was already on notice for poor job performance is thought to have sold the boxes to a paper recycler for $800 to $1,000 shortly before he resigned Dec. 8. Any money from the sale is unaccounted for.

An 86-page inventory shows the missing paperwork includes a wide range of information, from change orders to hand-written notes and specifications for buffets. Lawyers in the case were going through them to look for evidence to support arguments that CityCenter should pay general contractor Perini Building Co. for performing the job as expected, or that Perini owes CityCenter damages for substandard work riddled with serious defects. Hearings are set for March 12 to determine whether MGM can demolish the never-finished Harmon Hotel, which is at the heart of the dispute.

MGM moved about 930 boxes to the warehouse in January 2011, followed by 293 Desert Mechanical boxes in November. On Feb. 14, one of the law firms requested MGM boxes and was told they were probably in another warehouse.

But a box-by-box count revealed that 499 MGM boxes and 34 pertaining to Desert Mechanical had disappeared.

Renard in court Wednesday said his company had not performed a complete background check on the storage manager, identified as Bernard Thomas Henry, "but I don't know what we would have found."

Attorney Jeffrey Garofalo raised the possibility of industrial espionage.

"This is a very serious crime," he said. "There are a lot of ramifications beyond the value of the paper."

Renard said he tried to get the Las Vegas police to investigate but was rebuffed partly because of the low value of the paper itself. Plus Las Vegas police didn't want to jump into a civil case without a court order, which Gonzalez subsequently agreed to sign.

"We are going to go after (Henry) with everything we've got," Renard said.

Henry could not be located for comment Wednesday.

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