Palms settles lawsuit with club, restaurant operator

Palms owner George Maloof Jr. ended his 10-year business relationship with nightclub and restaurant operator Michael Morton on Tuesday after the parities settled their litigation.

The litigation, which included claims Morton mismanaged the business and diverted some of their joint-venture assets to himself and his new restaurant at Wynn Las Vegas, was settled in an "amicable and mutually beneficial" way, the Palms said in a statement.

Maloof declined Tuesday to comment on the settlement, beyond what was in the company's statement. The Palms on Flamingo Road, west of the Strip, is owned by Maloof and his family's company, Maloof Cos.

"Under the terms of the settlement, Maloof will take over the management of N-M Ventures, the entity that owns and operates N9NE Steakhouse, Ghostbar, Rain Nightclub, Nove Italiano, the Playboy Club, Moon Nightclub and the Stuff store, all in the Palms," the Palms said in a statement.

Morton sold his interest in the venture and will turn his attention to his wine bar restaurant "La Cave" at Wynn Las Vegas, along with other business interests.

Financial terms of the settlement were not disclosed. The "parties have wished each other well in their future business endeavors," the statement said.

Morton has denied the allegations and claimed Maloof and unhappy investors were trying to force him out. He also denied claims of evading income taxes and fraud made by Maloof's attorney, Donald Campbell, in an affidavit filed in November.

Morton, whose father built the Morton's of Chicago steakhouse chain and created the original Playboy Clubs with Hugh Hefner, partnered with the Maloofs to develop and then operate several of the most popular clubs and restaurants at the Palms that opened in November 2001.

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.