Glenn Schaeffer, former director of the Mandalay Bay Resort Group, will have to pay $2.3 million to two fellow high-level Las Vegas casino executives after the three men fell out over a New Zealand winery.
On Tuesday, New Zealand’s Supreme Court declined to overturn a lower court ruling that put Schaeffer on the hook for the money.
The dispute began in 2015, seven years after former MGM Resorts International CEO Jim Murren, and Daniel Lee — former CEO and chairman of Pinnacle Entertainment and the Palms, and current president of Full House Resorts — invested big in Schaeffer’s new business venture, a vineyard and winery called Mahana Estates.
The business went into receivership in 2018. But at one point, it was one of New Zealand’s biggest winery-based tourism and hospitality operations, according to The New Zealand Herald.
Triple Threat
Murren invested $1.6 million in Mahana Estates, while Lee put $700,406 into the business. They thought they were becoming partners and shareholders. But they soon discovered the shares representing their investments were worthless, and that Schaeffer had been spending their money as though it were his own.
I would not have invested if I had known the partnership was effectively a shell or a ruse, and that Glenn would instead keep the money and would also keep his own assets and investments in [Mahana] Estates in his own name,” Murren told a court in 2018.
Schaeffer had previously tried to have the case dismissed because he claimed Lee had made a threat to his life, his family, and his dogs.
He said if I did not give him back his money that he would bury me in the desert like in the old days, he would destroy my children’s lives, and bankrupt my ex-wife and travel to Omaha to kill my three show dogs. He ended his threats with the words ‘give me my f**** money’,” Schaeffer said, according to court documents.
Negligent Misstatement
But ultimately, Schaeffer, who was also formerly president and CEO of the doomed Fontainebleau resort, was judged to have made negligent misstatements to Murren and Lee and was ruled liable for them. He was ordered to repay his former business partners their investment, plus interest.
But the casino executive turned vintner appealed, arguing the court should not have applied New Zealand law to so-called negligent misstatements that were made and acted on in Nevada.
His appeal was dismissed in June after a retired federal judge from Nevada, called as a witness, testified that Schaeffer had also broken the law in the Silver State.
The New Zealand Herald reports that the Supreme Court panel said Tuesday it was not satisfied it was “in the interest of justice” to grant the application, and dismissed it, ordering Schaeffer to pay an extra $2.5k in costs to Murren and Lee.
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