Strip Club Fraud Verdict Upheld
July 1, 2014In 2005, Brad Keiller, an investor in adult entertainment clubs all over the world, came to Dallas to explore the purchase of Texas Show Girls, a club owned and operated by Curtis Wise. Following negotiations, the parties signed a share purchase agreement in which Wise warranted that Keiller could rely on Wise’s representations that, among other things: (1) the club’s lease was in good standing and not in default; and (2) the club had only one pending investigation by the Texas Alcoholic Beverage Commission. As it turned out, neither of these representations were true. The club’s lease had been terminated and the purported single pending TABC investigation was actually 12 separate charges (for, among other things, underage drinking, prostitution, lewd conduct, and drug use) consolidated into a single action that was going to result in the termination of the club’s liquor license. On appeal, the Court upheld the jury’s $704,480.45 fraud verdict based on these facts, finding that Keiller had presented sufficient evidence to establish his fraud claim.
