Headliners Entertainment (fka HLEG)

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http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20070222/BUSINESS/702220406/1003/ARCHIVES

3 clubs at 4th Street evicted
N.J.-based owner to file Chapter 11

By David Goetz
[e-mail]
The Courier-Journal



A judge yesterday ordered dance bar Red Cheetah and two other nightclubs evicted from 4th Street Live, a lawyer for the bars said.

Attorney Herb Segal said the clubs have seven days to decide whether to appeal the order from District Judge Deborah Deweese.



Headliners Entertainment Group, the New Jersey-based owner of Red Cheetah, Palm Bar and Parrot Beach, plans to file for Chapter 11 bankruptcy protection this week, Segal said. The clubs have been closed since earlier this month.

Headliners has closed clubs in Cincinnati, Baltimore and Jackson, Miss., in the last year, and filings with the Securities and Exchange Commission show that its liabilities exceeded its assets by $12.1 million as of Sept. 30.

If the bankruptcy goes forward, Segal said, it would be up to a court-appointed trustee to decide whether Headliners should pursue an appeal of the eviction in Jefferson Circuit Court, where Headliners already is suing 4th Street Live developer Cordish Co., claiming unfair trade practices.

The future of that lawsuit also would be in the hands of the bankruptcy trustee, Segal said. With a possible appeal and the lawsuit still pending, it remains unclear if or when the three clubs will leave the property where they had operated since 2004.

Cordish partner Hogan Development has announced plans for a new nightspot called Hotel that would take over most of the space occupied by Red Cheetah and the other two bars.

Cordish claimed during the eviction proceedings that Headliners owes it $386,643 in rent and other fees from July through the end of this month. Headliners said it had paid Cordish more than $1 million in rent before stopping the payments, complaining of unfair treatment.

Headliners said Cordish made the company charge admission and maintain a $3 minimum price for drinks -- requirements it didn't level on other clubs at the downtown entertainment complex.

Cordish argued in the eviction suit that Headliners officials intentionally shifted funds from the three clubs to themselves as part of an effort to defraud the entertainment complex.

Red Cheetah was one of the most popular attractions in the early days of 4th Street Live. According to Headliners filings with the SEC, between their opening June 17, 2004 and Sept. 30 of that year, the 4th Street Live clubs had sales of just under $2 million and net income of $551,000.

Reporter David Goetz can be reached at [phone].