Unhappy condominium buyers sue Cosmopolitan’s owners
The Cosmopolitan of Las Vegas continues to deal with disgruntled condominium buyers, even though many of the former owners accepted a settlement to walk away from their purchases.
Attorneys representing four buyers who participated in the $60 million settlement and a former employee filed a lawsuit Monday seeking to have their clients’ entire deposits returned.
The lawsuit filed in Clark County District Court claimed The Cosmopolitan’s owners misled investors into accepting the settlement and receiving 74 of their deposit principal.
In their complaint, attorneys with the Las Vegas-based law firm Santoro, Driggs, Walsh, Kearney, Holley and Thompson are seeking class action status and a jury trial to force the owners to return their clients’ entire deposit with interest.
Deutsche Bank and its subsidiary Nevada Property 1 LLC acquired the property in 2008 from 3700 Associates LLC, the original developer, which defaulted on $760 million in loans made by the German bank. At the time of the purchase on 2005 and 2006, the original developer promised the units would be ready to occupy in early 2008.
According to the 16-page complaint, Deutsche Bank and Nevada Property 1 decided to abandon The Cosmopolitan’s condominium component and build a hotel-casino property.
“Once (they) made that material decision, they were legally and contractually obliged to disclose it. (They) instead decided to conceal their decision and use the class actions that were filed by buyers to negotiate a partial refund of plaintiff’s deposits, so that they could coerce (them) into forfeiting over $150 million of their and interest to The Cosmopolitan, despite their decision to convert the project to all-hotel,” the complaint said.
Messages left with officials from The Cosmopolitan were not returned.
The lawsuit also seeks a permanent injunction to protect Todd Mastej, a former employee of 3700 Associates and Nevada Property 1, from retaliation for passing on documents that showed the units “failed to meet applicable soundproofing standards” and that it was decided in 2009 to make the project all hotel and make “significant material changes to the plans of their units.”
The complaint accused the owner of committing fraud “by negotiating a class action settlement that called for a partial refund … under the auspice that The Cosmopolitan was proceeding with its construction and conveyance of (the) condominium units, while in reality (they) had no good faith intention or desire to actually” deliver the units.
Potential buyers paid deposits of 20 percent to secure one of the condominiums. In April 2010, Cosmopolitan developers finalized a $60 million settlement with more than 400 buyers involved in a class action lawsuit.
The luxury condominiums on the Strip had been priced in the high six-figure to low-seven figure range when the Las Vegas housing market collapsed.
Approximately $250 million in deposits were paid to hold the condos. Even after the settlement, Deutsche Bank and Nevada Property 1 retained more than $150 million in deposits and interest, according to the lawsuit.
Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.