There has been a dramatic development in the dispute waged by Israeli tycoons over the Plaza Hotel in Las Vegas. Yesterday Clark County District Judge Elizabeth Gonzalez ruled that the petition filed by Tamares Las Vegas Properties against the unauthorized use of the Plaza Hotel & Casino name in Las Vegas by Elad Properties, controlled by Yitzhak Tshuva, and IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Property and Building Ltd. (TASE: PTBL), will be heard by a jury.
According to media reports, the consortium plans to build a 3,500 square meter hotel plus a casino, commercial center and residential properties on 1.5 million square meters of space at an estimated total investment of $8 billion. The consortium is building the project on the site of the New Frontier Hotel and Casino on the Las Vegas Strip, which was acquired last year for $1.24 billion.
"Globes" first reported in November that the Elad consortium faced a challenge to the use of the Plaza brand from Tamares Group, controlled by Poju Zabludowicz. Tamares argued that the Elad Group did not have the right to use the Plaza brand since it owns a hotel and casino with the same name, which has operated in Las Vegas for 30 years, employing more than 800 people. In a decision issued in Las Vegas, US District Judge Phillip Pro granted a motion by Tamares to remand the case to Clark County District Court for a hearing on its request for a preliminary injunction.
In her ruling yesterday, Judge Gonzalez set the first hearing by a jury for July 21, 2008 However, in a meeting in chambers, she turned down Tamares' request for an interim injunction to bar the Elad consortium from using the Plaza name, in view of the fact that the construction of the new complex has not yet begun and is unlikely to be completed before the end of 2011.
Real estate sources say that Tamares can be happy that the case is to be heard by a local jury which knows the hotel, while Elad and its partners can be thankful that the judge did not grant Tamares's request for an injunction.
Elad is claiming title to the Plaza brand through its acquisition of the Plaza Hotel in New York in 2004 (much of which was later converted to luxury properties). It intends to expand the Plaza brand to other key cities such as Tokyo, Shanghai, Hong Kong, and Singapore in Asia, and Boston, Washington, and Beverly Hills in the US.
A spokesperson for Elad called yesterday's court ruling "a clear and unequivocal victory. In dismissing Tamares's motion for an injunction, the judge made it clear that its claim is without foundation. Elad is listed under federal registration as the owner of the Plaza name."
A spokesperson for Poju Zabludowicz said, "We're pleased that the court set a timetable for the case to be heard by a jury and we are confident that once we have made our case, the jury will acknowledge the fact that Tamares has exclusive rights to the Plaza brand in Las Vegas. As a final verdict will be returned within the next few months we do not intend to make to any comment on the legal process as long as the case is sub judice."
Published by Globes [online], Israel business news - www.globes.co.il - on January 15, 2008
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