Elie Samaha Accused of Diverting Nightclub Funds to Chinese Theatre

Elie Samaha, the former film producer who was accused of perpetrating a massive fraud on his investors more than a decade ago, is in hot water once again. Samaha and his partner, producer Don Kushner, now own the TCL Chinese Theatres and several Hollywood nightclubs, including Lure and Project Club L.A. Last week, a business

Elie Samaha, the former film producer who was accused of perpetrating a massive fraud on his investors more than a decade ago, is in hot water once again.

Samaha and his partner, producer Don Kushner, now own the TCL Chinese Theatres and several Hollywood nightclubs, including Lure and Project Club L.A. Last week, a business partner in an earlier nightclub sued Samaha and Kushner in L.A. Superior Court, alleging that a $580,000 investment had been diverted from that business to the Chinese Theatre and to their other ventures.

Samaha and Kushner did not return a call seeking comment. The plaintiff, Nightclubbing LLC, was founded by nightlife impresario Dave Dean and is now run by Kamyar Rezaie. Rezaie also did not return calls for comment.

According to the complaint, Nightclubbing invested $580,000 for a 50% stake in Hollywood and Ivar LLC in 2008. Nightlife Ventures, run by Samaha and Robert Vinokur, owned the other half of the company. The plan was to buy the former Ivar nightclub, split the space in two and reopen it as two clubs.

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Nightclubbing says that when it declined to invest more capital, it found its stake in the company diluted to 35 percent. The suit alleges that Kushner and Samaha then used their control over the company to engage in self-dealing transactions that resulted in Samaha and Kushner owning 80% and 90% of the two clubs, Roxbury and Hemingway’s.

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When Dean and Rezaie raised questions, they say they were assured that they would receive full repayment of their investment within 18 months of the clubs’ openings. Since then, however, the plaintiffs allege they have received only $700. They complained, and were told that the clubs were “simply not making enough money to make a distribution,” the suit states.

However, Dean and Rezaie contend that Samaha and Kushner deliberately operated the clubs in a way so that they would be unprofitable. The defendants then used the Roxbury space to open Project Club L.A. under a separate ownership structure, the suit alleges.

“Project Club L.A. is one and continues to be one of the hottest clubs in Hollywood, California, which is likely generating hundreds of thousands of dollars in monthly revenue at the Roxbury facility location,” the suit states. The suit accuses Kushner and Samaha of operating the business “for their own personal benefit by diverting money, assets, and business opportunities to themselves, and to business entities or individuals affiliated with Defendants Kushner and Samaha, including their relatives and friends.”

Dean and Rezaie claim that in 2012, proceeds from events at the Hemingway’s and Roxbury spaces were diverted to the entities that own the Chinese Theatre.

The suit alleges claims of breach of contract, fraud and conversion.

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