A dispute between Melco Resorts & Entertainment subsidiary COD Resorts Limited and the company that previously ran popular Macau nightclub Club Cubic, Luk Hing Investment Limited, has reached the Macau courts.
According to information contained in the 1Q22 results announcement of Luk Hing’s parent firm, Luk Hing Entertainment Group Holdings Limited, a lawsuit was launched by COD Resorts Ltd against Luk Hing last October for alleged “default of payment of the rental expenses and contingent rental expense” in relation to the operation of Club Cubic, previously located at City of Dreams Macau.
As reported by IAG at the time, Melco announced on 7 October 2021 that it had taken over the management and operation of Club Cubic and would reopen the nightclub under a new brand, subsequently revealed to be “Para”, which opened in January 2022. Luk Hing said this was due to a dispute between the two parties over rent relief.
However, in the company’s first quarter results announcement filed with the Hong Kong Stock Exchange on Monday, Luk Hing revealed the matter was now in front of a Macau court after COD Resorts launched civil proceedings on 19 October 2021 seeking payment of HK$86 million for owed rental expenses, rental expenses for the remaining contract terms and interest.
In response, Luk Hing filed an objection on 12 January 2022 in which it described COD’s claim as “onerous, excessive, disproportional and unreasonable.”
It also filed a counterclaim in relation to the equipment held by Luk Hing Investment which it said remains unrecovered in the former premises of Club Cubic. Taking credit offsets from such equipment into account, Luk Hing is seeking HK$5.8 million from COD Resorts.
On 7 March 2022, COD Resorts filed its reply to Luk Hing’s objection in which it claimed the equipment was accounted as a cost of Luk Hing Investment but was immediately incorporated into the Club Cubic Macau, with COD becoming the owner and proprietor of the equipment following the club’s 2011 opening.
“As of the reporting date, the liability of Luk Hing Investment in respect of the summons cannot be reliably measured as the lawsuit is still in its initial stages,” Luk Hing said.
Luk Hing continues to operate another nightclub, CUBIC SPACE+, in Zhuhai City and a restaurant business in Hong Kong.
