Supreme Court turns away appeal over Mahana Estates dispute between Las Vegas casino executives

The Mahana Estates case has come to an end with a Supreme Court decision. Photo / Supplied

A businessman ordered to pay $3.3 million to two Las Vegas casino executives over a failed Nelson vineyard partnership has lost a final appeal bid at the Supreme Court.

Glenn Schaeffer, an American-born hotelier who formerly headed the Mandalay Resort group in the US, was sued by James Murren, the chief executive of MGM Resorts International, and fellow casino boss Daniel Lee.

Yesterday, New Zealand's Supreme Court rejected a final challenge by Schaeffer to pay back the Nevada men.

The lawsuit, which began in 2015, came after Schaeffer acquired an 80 per cent interest in Mahana Estates - one of New Zealand's biggest winery-based tourism and hospitality operations.

He also invited Murren and Lee to invest in the vineyard through a Nevada limited partnership.

Murren invested more than US$1.6m ($2.3m) and Lee more than US$700,406 ($1m), but the vineyard business failed and the pair lost all of their money.

The bitter dispute that ensued included Schaeffer alleging Lee threatened to destroy his children's lives, kill his show dogs and "bury me in the desert like in the old days" if he didn't get his money back.

After the case was heard in High Court at Nelson in 2018, Schaeffer was ruled to have made negligent misstatements to Murren and Lee and was liable for them.

It transpired that Schaeffer had not transferred his original 80 per cent interest in the vineyard to the limited partnership, and had dealt with the assets intended to be owned by the partnership as if they were his own.

Schaeffer - who has donated substantial sums to the arts in New Zealand - was ordered to pay Murren and Lee back their investments plus interest.

But the case continued with an appeal to the Court of Appeal. Schaeffer argued the High Court ought to have applied Nevada law rather than New Zealand law.

The Court of Appeal dismissed the appeal in June.

Schaeffer then sought leave to appeal to the Supreme Court, hoping to advance grounds over whether the High Court was correct to apply New Zealand law to the negligent misstatements made and acted on in Nevada.

The Supreme Court bench of Justice Joe Williams, Justice Susan Glazebrook, and Justice Mark O'Regan, however, said they were not satisfied it was in the interests of justice to grant the application and dismissed it.

They also awarded costs of $2500 to Murren and Lee, ending the five-year legal battle.

Mahana Estates was tipped into receivership in September 2018.