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Investors Demand $4 Million From MGM Grand

•  Breaking Legal News     updated  2008/08/20 08:45

A group of investors say they were cheated of $4 million in "air rights" securities at the Signature at the MGM Grand Hotel/Casino high-rise condo-hotel complex.

The plaintiffs say they paid about $4 million for condo-hotel units, to rent them to tourists. They say they invested based on developers' false promise that they'd get back 60 percent of the revenue from their rentals.

Instead, investors say in Clark County Court, the developers peppered them with undisclosed fees before splitting up the take, through surcharges such as a $10 "FF&E Reserve" fee, a $7-to-$10 per night "Subject Unit Maintenance Fee" and a $20 monthly "Digital Television and Internet fee."

Other hidden fees included a monthly "Transient fee" and a "shared Component Budget Fee" of as much as $800 per month.

Investors also say they were stiffed on revenue from pay-per-view TV and movies, room service, Internet fees, cabana rentals, room taxes and income from mini-bars.

Developers "concealed and suppressed the material facts regarding the true economic value of such investment ... in order to intentionally induce the plaintiffs' consent to purchase the condominium unit," the lawsuit states.
In the end, investors say, promises that their investment would be profitable were false, and the units "produced rental income far below the amounts forecasted by defendants."

Defendants include Turnberry/MGM Grand Towers LLC, MGM Grand Condominiums, The Signature Condominiums, and others.

Plaintiffs demand damages, civil penalties up to $100,000 and rescission of contracts. They are represented by Robert Gerard.

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