Starr sues over A.C. deal

Restaurateur Stephen Starr alleges that he was duped into opening branches of Buddakan and the Continental at the Pier Shops at Caesars in Atlantic City.

Starr's lawsuit, filed in U.S. District Court in Philadelphia against the pier's developers and landlord, alleges fraud and demands more than $20 million. His company invested $5 million and obtained more than $5 million in financing, the suit says. The restaurants, which opened in late 2006, are losing money on what the suit describes as the "half-empty" third level of the mall.

Court papers contend the defendants - including nationally known real estate figures Sheldon Gordon and son Scott, Gordon Group Holdings, and the Taubman Realty Group - dangled restaurateur Jeffrey Chodorow as bait to keep Starr from abandoning his project amid construction delays and overruns that had led Chodorow to terminate his lease and walk away from his own nightclub and restaurant deals.

Starr's attorney Paul R. Rosen of Spector, Gadon & Rosen in Philadelphia said the defendants had lied to Starr by telling him that Chodorow had a binding lease when Starr expressed concern that construction had not begun.

Starr was counting on Chodorow's branch of the Las Vegas club rumjungle to drive traffic to Buddakan, the papers say. Chodorow also had planned to open the restaurant English Is Italian, named after chef Todd English.

Jeffrey Meyers of Ballard, Spahr, Andrews & Ingersoll, an attorney for Gordon Group Holdings and Taubman Centers, said the assertions in the complaint were "not factually accurate."

Rosen said the complaint was based on the testimony of defendants and documents produced during pre-complaint discovery in a matter that Rosen filed against the defendants last year in Philadelphia Common Pleas Court. Chodorow's business partner, Philadelphia lawyer Neil Faggen, gave a deposition.

Rosen said neither Faggen nor Chodorow had any involvement in the allegations involving Starr. Faggen did not return a call seeking comment.

Starr's complaint includes copies of leases that Starr and Chodorow signed in 2004.

By fall 2005, with no work under way on rumjungle or English Is Italian, Starr asked for the names of tenants with binding leases. It was clear, Rosen said, that Starr wanted to opt out. Defendants told Starr in a December 2005 letter and in a January 2006 meeting that Chodorow still had binding leases, according to the suit, which alleges that they had been terminated in November 2005.

Starr opted to proceed, the suit says. Buddakan, an Asian restaurant, and the Continental, a martini bar, opened in October 2006, months after the planned openings in early summer.

Chodorow, seen locking horns with chef Rocco DiSpirito on the NBC reality series The Restaurant in 2004, owns posh restaurants including China Grill and Asia de Cuba. Court papers said the defendants had used Chodorow's name as a marketing tool "to deceive prospective tenants and to give the appearance that a high-profile Las Vegas nightclub attraction would open alongside other tenants at the pier." In effect, Rosen said, it was a "bait-and-switch."

He said he would ask the court to rescind Starr's leases and permit the restaurants to leave - "to do to the developers what they did to Starr. Leave them in the dark."

Besides Buddakan and the Continental, the pier's less-formal restaurants include Phillips Seafood, Sonsie, Souzai, Game On, and Trinity Pub. The pier, which fronts the Boardwalk, includes two levels of shops known as the Pier Shops at Caesars. It was previously known as Ocean One and the Million Dollar Pier.

Since litigation began in the summer, Buddakan and the Continental have been paying rent into an escrow account, the suit says. The landlord, identified as Atlantic Pier Associates, filed a complaint in federal court last year, alleging that Starr's restaurants were not allowed to pay into an escrow account under terms of the leases. District Judge Eduardo C. Robreno stayed that complaint pending the filing of the recent claim. Robreno set a trial for November.