By Steve Green
The owner of the Rumjungle nightclub at Mandalay Bay resort in Las Vegas filed for Chapter 11 bankruptcy reorganization Tuesday, saying it needs court protection to prevent Mandalay Bay from shutting it down.
The bankruptcy filing by Rumjungle Las Vegas LLC listed assets of $12 million and liabilities of $1.145 million, including $1.1 million in rent owed to Mandalay Bay -- an amount Rumjungle said is disputed.
Rumjungle, in a statement today, said it's been locked in a legal dispute with the MGM Mirage property over Mandalay Bay's opening of the eyecandy sound lounge, an action Rumjungle says violates its contract allowing it to be the sole nightclub on the property.
Rumjungle said "the unlawful competition from eyecandy and other venues has adversely impacted Rumjungle’s finances''.
MGM Mirage officials could not immediately be reached for comment. The company typically does not comment on litigation.
"It is our goal that Rumjungle will remain open and all employees will remain employed while we assert our contractual right to be the sole nightclub at Mandalay Bay," Neil Faggen, manager of Rumjungle, said today in a statement. "With the exception of this dispute, Rumjungle's finances are in good order and we continue to provide a unique and first-class dining and nightclub experience".
"Mandalay Bay has no right to resort to intimidation or threats of closure when we believe it is Mandalay Bay that has violated the nightclub-exclusive provision of our lease agreement," Faggen said in his statement. "Rumjungle has acted in good faith at all times, and we will continue to fight for our employees and valued customers''.
The bankruptcy filing said gross revenue from the club of $16.2 million in 2007 fell to $10 million in 2008 and $6.6 million in 2009 -- though it's unclear how much of that decline was tied to the recession and how much was associated with the dispute with Mandalay Bay.
Las Vegas Sun
