Its nightclub and adjacent management offices affect an air of aloof respectability, complete with valet parking and handcarved Spanish doors.
Inside, a brass chandelier dominates the foyer. An ornate staircase ascends from Italian tile floors to the exclusive members-only area upstairs. Exquisite abstract paintings of nudes adorn the walls.
Past the entryway, svelte young women saunter about an expansive room that resembles more a plush study than a bar. A few writhe in feigned sexual arousal on a trio of stages, naked except for tiny underwear called T-backs. Others, dressed in scant, easily doffed evening dresses, walk the floor and visit tables, flirting and teasing their male guests, who respond with a mixture of schoolboy cockiness and flustered desire.
This is Cabaret Royale, the upscale club touted as the finest, cleverest, cleanest topless bar in the world.
For a few hours--and about $100 for the full experience--you can be James Bond, and one of the scores of accommodating young women around you can be your Pussy Galore.
A widescreen video does, in fact, cut to film clips of a dashing Roger Moore combating sinister men, commandeering speedboats, and lounging with voluptuous women, while Paul McCartney sings "Live and Let Die" in the background.
The illusion, masterfully designed by Cabaret Royale owner Salah Izzedin and his family, is complete. Cabaret Royale, which boasts a roster of 400 topless dancers and $1,500 annual memberships, is exactly what Izzedin has promised it would be: an elegant playground for well-to-do men, a fantasyland for the traveling executive, the country's premier purveyor of taunting, untouchable female flesh.
Izzedin has compared his nightclub to the famous Parisian cabarets of the 1930s. "This is the first club ever where dancers bring their parents to watch," he told the Dallas Observer in 1992.
Cabaret Royale, he said then, was destined to be big--bigger than any of its competitors in Dallas. Bigger, in fact, than Playboy.
"Ten to 15 years from now," Izzedin said, "We'll have clubs in every major city. We'll be putting out our own videos. Cable shows. A magazine. A clothing line."
The company has already worked with Playboy on several joint projects, including a video, "The Girls of Cabaret Royale," that hit number 18 on Billboard's video retail sales chart. And the club recently released a solo production, "Calendar Girls of Cozumel."
And that's just the beginning.
With the business acumen of his highly educated family backing him up--sister Leila Izzedin is executive vice-president of finance, and cousin Joe Najjar is vice-president of operations--Izzedin continues to build an international, bared-breast entertainment network. The Izzedin family now runs a Cabaret Royale club at the site of famous Studio 54 in New York City, and an equally ostentatious franchise, Club Royale, in Mexico City's trendy Zona Rosa district.
At the same time, Salah Izzedin scouts out additional international sites, his expansion plans fueled by fresh capital from private investors. Next year, the company hopes to offer its stock to the public for the first time. Indeed, the company's future prospects seem as irrepressible as sex itself.
Yet the glittering illusion that is so much a part of the club's image hides an untidy reality today. And Salah Izzedin, who as little as two years ago courted the press, doesn't reply to requests for interviews. His chief minions insist he's out of reach--traveling from city to city, country to country.
Back at home, Cabaret Royale's flagship Dallas operation is embroiled in a nasty brew of legal and financial troubles--capped, in May, by its officers' decision to file for bankruptcy on behalf of two of the many corporations Izzedin had created to manage Cabaret Royale's affairs.
The U.S. Bankruptcy Court, in turn, has appointed a trustee, who will investigate--among other matters--whether Izzedin filed bankruptcy for the two companies merely to avoid paying $11 million in back wages sought by the U.S. Department of Labor for Cabaret Royale's "contract" dancers, who the federal agency considers employees.
If the Labor Department wins its case, the Internal Revenue Service will take its turn, seeking hundreds of thousands more in unpaid payroll taxes.
Then there's the spate of individual lawsuits against Cabaret Royale. One former employee, Ann Marie "Ami" Lindsey, sued the club for discrimination after managers told her she was too old to dance topless. The $2.5 million suit, filed in 1989, is still pending; the bankruptcy filings have stalled it temporarily.
Several others have sued Cabaret Royale for lesser alleged evils. It seems that everyone wants a piece of Salah Izzedin.
Neither Salah nor Leila Izzedin responded to requests for interviews, preferring that two senior Cabaret Royale officers, attorney Tim Millard and public relations director Dianne "Birdie" Bird, field questions from the press.
Millard, the club's $240,000-a-year director, dismisses Cabaret Royale's problems as typical trials of a growing firm. "Any company that moves from the local market to a national one goes through a period like this," he says. "It's not unusual at all."
The coming year could prove pivotal for Izzedin and the Cabaret Royale name. The 47-year-old, Lebanese-American businessman is as close as he's ever been to realizing his dream: creating a soft-porn empire that surpasses Playboy and Penthouse, the industry's pioneers--and gaining respectability.
But adversity could just as easily unravel Salah's dream. The multimillion-dollar lawsuit, the DOL's decision to seek back pay, and the bankruptcy proceedings have the potential to strip Cabaret Royale to its barest essentials: a Dallas titty bar with drinks that cost too much and a tarnished chandelier in the foyer.
Before sweeping into the topless-bar industry, Salah Izzedin sought his fortune in the oil business, running his own oil trading company, Oceanic Oil Corporation, and holding an interest in another, Houston-based Eton Oil.
The highly educated entrepreneur hailed from a Middle Eastern family with the means to back his business ventures. Headed by its patriarch, accounting professor Fuoad Abu-Izzedin, the family controlled corporations in the United States, Europe, the Middle East, and Central and South America. (Cabaret Royale officials say the 85-year-old Fuoad Izzedin still takes a keen interest in his son's enterprises, visiting the nightclub and keeping in contact with its directors from his Austrian home.)
During the oil industry's declining days in the early '80s, Eton shareholder Robert Pensotti sued Salah Izzedin and another company officer for what Pensotti considered a bad loan. Izzedin eventually paid back the loan.
When oil went bust in Texas, Izzedin invested in his first topless nightclub, Rick's Cabaret, in Houston. He and a handful of Houston businessmen pulled together a hodgepodge of loosely related corporations to start Rick's, which became known as the first upscale topless club--the forerunner of Cabaret Royale.
Rick's was profitable beyond its investors' wildest dreams--raking in millions each year. Former shareholders say everybody got greedy, and the club became the focal point for vicious and protracted court fights. In Texas topless circles, the battle among the owners of Rick's Cabaret in Houston became legend.
The tale began in 1982 when Izzedin befriended a grizzled titty-bar owner with the colorful name of Dallas Fontenot. The two went into business with Houston businessmen J.B. Gentry and Vernon Young and opened Rick's Cabaret nightclub in 1983. Fontenot and Gentry planned to buy out Izzedin and Young within a few years. The buyout "was a fabulous deal for (Izzedin) and he would go his way and Mr. Gentry and I would stay there as partners and live happily ever after," Fontenot would later say during a civil suit deposition.
It didn't work out that way. To get Rick's going, the investors had pooled their assets, making them dependent on each other. It so happened that Izzedin held the precious liquor license, and Rick's was proving too profitable for him to consider giving it up.
Fontenot and the others eventually cut a deal with Izzedin that gave him one-third of Rick's operations in exchange for the liquor license. Fontenot was unhappy about the terms, but figured he had no choice.
Soon afterward, Fontenot booted out Gentry "...over his partying and tooting drugs with people out of the kitchen and giving drugs to the girls and all that kind of crap," according to his court filings. Gentry could not be reached for comment.
After Gentry's ouster, Izzedin began spending more time at Rick's, handling a greater share of the topless club's day-to-day affairs. At the same time, Izzedin roped in an attorney named Robert Watters as a new partner. Izzedin wooed Watters because of his tax expertise--and the lawyer's polished, cultured air.
"Salah is not the greatest guy in the world to be a P.R. man," Fontenot recalled in court records. "He is not the kind of guy you send out and try to get a lease and try to talk a landlord into putting a topless club into a shopping center. We needed a man that had a good background and was intelligent and could go out there and cut a deal."
Despite the turmoil among its owners, the nightclub's tremendous success blunted any ill feelings--for a while, anyway. Rick's became renowned for catering to Houston's well-to-do businessmen. The bar's Bering Avenue address--on a popular entertainment and dining thoroughfare--was ideal. In its first year of operation, Rick's grossed $5 million.
Rick's would evolve so successfully, in fact, that the men began scouting for a site to build Rick's II in Dallas. In 1987, Watters located suitable property along Composite Drive--which would later become home to Cabaret Royale.
But by then, Rick's corporate structure--a confusing collage of corporations--was falling apart amid allegations of embezzlement, narcotics, prostitution, and illegal transfers of assets. During three years of bitter court fights over Rick's assets, investors and owners of the club rarely seemed to know which corporation owned what part of the club or which partner owned how much of any given corporation.
The court battles began in 1988 when Vernon Young, one of the original investors, filed suit in Houston against Fontenot, Izzedin, and Watters, contending the men were illegally channeling the nightclub's profits into their own pockets, and weren't giving Young his fair share.
When confronted--according to Young's suit--both Izzedin and Fontenot admitted pocketing unreported revenues.
"Izzedin admitted that he had received $45,000 from Fontenot, knowing that the funds were diverted corporation proceeds; and he further admitted that he was going to continue to divert funds until he had diverted $300,000," Young charged in his suit. (Young could not be reached for comment; Fontenot declined requests for an interview.)
The suit also states that former owner Gentry, before his ouster, had hired a consultant to audit Rick's liquor sales; he discovered that more than $1 million was missing from Rick's Cabaret.
By 1988, Fontenot and Watters had turned against Izzedin. During Rick's early days, Izzedin had spent little time at the topless club. When he was there, he was quiet and unobtrusive. But as time wore on--according to his partners' complaints, stated in court records--Izzedin became a party animal, aggressively pursuing dancers and waitresses.
Fontenot and Watters recounted telling Izzedin that his "behavior in picking up and dating numerous of our employees and dancers simultaneously was giving us significant cause for alarm."
The problems reached a new low in January 1988, when a young man came to the club complaining that the "owner of Rick's" had picked up his 16-year-old girlfriend in a black Mercedes and driven her to the owner's house for dinner.
The "owner" was said to be Izzedin.
Watters and Fontenot wrote a letter to Salah the next day, complaining about his conduct. "Apparently [the girl] wears braces and looks even younger than 16 years," the men wrote. "This behavior on your part is totally unacceptable to both of us. People who own and work in a highly visible and successful topless nightclub must maintain standards of behavior that put them above attack for illegal and immoral sexual behavior."
Izzedin responded six days later with a handscrawled, personally delivered note. "I sincerely want to put an end to all the furor and rumors," he wrote his partners. "In all honesty, during the past year, I might have dated a girl too many from the club and women like to talk. However, I never realized the magnitude of the talk (my fault, nobody is perfect). Especially for a man of my position in this city."
Izzedin denied taking the teenager to dinner, however, maintaining that he'd only given her a ride home.
The accusations of sordid behavior only got worse, with Fontenot and Watters later charging, in a 1991 lawsuit, that Izzedin had pressured female employees into having sex and had provided narcotics and promoted prostitution at the club.
And around the same time Fontenot and Watters complained about the 16-year-old, police arrested several of Rick's dancers for prostitution after they'd propositioned undercover Texas Alcoholic Beverage Commission agents inside the club. Rick's was also cited several times for lewdness and drunkenness among its employees, further damaging the club's image. Male agents wrote lengthy reports about dancers fondling and rubbing the agents' genitals, and described how some dancers and waitresses had offered them sexual favors for a fee.
Later that year, Fontenot and Watters decided to force Izzedin as far away as possible from the club's daily affairs--voting themselves president, vice-president, secretary, and treasurer of the corporation that controlled Rick's Cabaret. The move left Izzedin as the only owner who wasn't a club officer as well.
Two weeks later, Izzedin resigned from the corporation's board of directors, saying he wasn't comfortable with the way Fontenot and Watters ran the topless club.
When he left, Izzedin took with him some damaging information about the way Rick's remaining owners had handled the club's receipts. He used it to strike back at his former partners.
In a letter to Fontenot and Watters, included as an exhibit in Young's lawsuit, Izzedin admitted stealing unreported revenues from Rick's and asserted that they had, too.
"I have amended my 1986 federal income tax return to reflect income I received that I did not previously report," he wrote. He demanded that Fontenot and Watters also declare unreported income for 1986 and 1987. If his ex-partners did not respond within 16 days, he warned, he would send a copy of the letter to the IRS.
Izzedin instructed his accountant, Gene B. Reynolds, to report the pilfered money, according to Reynolds' testimony for Young's suit. Izzedin also told the accountant to change IRS corporate income tax statements in which he'd reported stock transfers that "had not actually taken place," Reynolds said.
Izzedin also switched positions in the Vernon Young suit, joining the one-time investor in asking the courts to take control of Rick's by appointing a trustee to oversee operations. The trustee, appointed to preserve the disappearing assets of the still-profitable club, would take over in March 1989.
Fontenot and Watters would later find out that Izzedin was trying to open a club called Rick's Mansion at the Composite Drive location in Dallas. The men sought an injunction against Izzedin from using Rick's trademark. They also moved quickly to get a liquor license for a fictitious bar named "1,001 Arabian Nightmares"--to be located virtually next door.
The court ruled that Fontenot and Watters acted in bad faith when they acquired the liquor license. The men eventually hammered out a settlement with Izzedin; the trustee would turn over Rick's in Houston to Fontenot and Watters (Fontenot would eventually withdraw from Rick's altogether), and Izzedin would get the Dallas property.
He named it Cabaret Royale.
The first few years of Cabaret Royale were heady and seductive.
Izzedin sent agents into other Dallas topless clubs to recruit the prettiest, classiest dancers and waitresses.
Cabaret Royale's opening in December 1988 was an event. Politicians, celebrities, sports stars, and CEOs descended on the place, where they were treated to an elaborate floor show and cabaret.
At the time, Cabaret Royale boasted a "champagne room," where the richest guests mingled and bought copious amounts of wine.
Izzedin also reserved a section of tables--collectively known as "Salah's table"--where his friends conducted private parties amid the revelry. Salah's underlings would pull waitresses and dancers off the main floor to cater exclusively to Salah's table, where the guests ate and drank for free. Waitresses grumbled that the "honor" of working Salah's table often meant they didn't make any money, because the VIPs seldom tipped.
The dancers were beautiful and sultry--yet there were rarely enough of them. Cabaret Royale managers solved the dilemma by "flooding the floor." Because it was easier to recruit pretty waitresses than pretty topless dancers, Cabaret Royale hired many more waitresses than it needed. When a gorgeous waitress realized there were too many waitresses working at one time to allow her to draw much in tips, she was encouraged to make hundreds of dollars more as a dancer.
Often, after a few free drinks, the waitress would gather the courage to take the stage that very night. She either liked it and stuck with it, or she quit, according to former employees.
Izzedin himself would go to upscale dance clubs to recruit beautiful women. He often invited women to Cabaret Royale for dinner, where they would sit at Salah's table and take a tour of the luxurious Cabaret Royale premises, which include a weight room, a boutique, a VIP loft, and Las Vegas-style dressing rooms.
Often the young women were so impressed, they started work the next day.
Izzedin knew how to cater to the rich and powerful, applying what he'd learned at Rick's to Dallas. And the happier the customers were, the richer the club became. Cabaret Royale grossed more than $4 million in its first year. The dancers share stories of rich benefactors who bestowed thousands of dollars in gifts and cash on them.
Despite its country-club affectations, Cabaret Royale still endured the problems of a typical nightclub--countless police calls for car thefts, drunken fights, and an occasional drug overdose. And occasionally guests cried foul when the bill came--like the customer who caused a scene when he learned his bill for the evening was $700.
The vice woes that beset Rick's, however, were never a problem at Cabaret Royale. Dallas police have no record of vice violations at the topless club since its opening in 1988.
Thanks in part to an aggressive marketing campaign, Cabaret Royale's reputation reached dizzying heights. Several upscale magazines featured the topless club in their pages--including Elle, Vogue, and Details. The television show "Lifestyles of the Rich and Famous" profiled Salah Izzedin, and Robin Leach, the show's host, reportedly had a grand time when he visited Cabaret Royale. More recently, New York magazine made much ado about the nightclub taking over Studio 54.
And when Playboy came to Dallas to feature several upscale topless clubs in its magazine, Cabaret Royale had the gumption to turn it down.
"We told them that we didn't want to be lumped with all the other clubs," says the company's vice-president of public relations, Dianne "Birdie" Bird. "They dispatched someone who [looked us over] and went back and said, 'you should really look at this place.' We've had a longstanding, cordial relationship ever since."
In October, Cabaret Royale filmed the "Great American Strip Off," which was scheduled to run on the Playboy Channel this month. It recently exported a group of dancers for an auto-parts show in Germany.
But every now and then, Izzedin's past invades the present.
In 1990, Bank One sued Izzedin for defaulting on a $357,000 real-estate loan in Houston. The bank had trouble contacting Izzedin "because he absents and secrets himself and evades all service," according to a complaint filed in Harris County District Court.
And in 1992, at the height of Cabaret Royale's public exposure, the bank would garnish Izzedin's checking account, drawing out $45,810.
"Oh, I'm a writer," says Simone, a doe-eyed topless dancer at Cabaret Royale. "I mostly write poems."
After slight urging, she recites one of her originals. It's a poem about writing poems.
She apologizes and says she has to turn her attention to the man at the table. That's where the money is.
But she's too late. Margo has arrived, plopping down on the man's lap. Simone tries to gesture the interloper away, but Margo ignores her. Simone sighs in frustration, cuts a withering glare at Margo, and leaves the table.
They're typical Cabaret Royale dancers, pretty, wholesome-looking, and confident about their attractiveness to men.
Like most of the topless dancers and scantily clad waitresses, they seem to enjoy working at Cabaret Royale, where dancers and waitresses can pull in $500 on a good night.
Many have other aspirations, too. Margo is an artist. There's also a teacher, a student, and an aspiring model.
Yet there's little incentive to leave the harem. The most beautiful and talented illusionists at Cabaret Royale have been known to walk out with $1,000 in cash from a single night.
The path to earnings is simple: the dancer first performs two sets on the main stage, then dances brief stints on smaller, lower stages around the club.
Men, attracted by their moves, approach and tip. But the real money is made from brief table dances, where the dancers gyrate, pose, and pout. The minimum gratuity for such personal service is $20.
To keep the cash flowing, Cabaret Royale distributes "Cabaret Bucks" that customers buy with credit cards. At the end of the night, the girls exchange the play money for cash. Cabaret Royale charges the dancers a $35 "administrative fee" for the privelege of performing there each night. Then the company converts the Cabaret Bucks into cash, skimming off a small percentage before paying the young women the next day.
It's an ingenious scheme. But the play money and absence of a minimum wage quickly attracted the attention of the U.S. Department of Labor.
In July 1989, seven months after Cabaret Royale had opened for business in Dallas, the Labor Department conducted a routine audit of the club to see if it complied with wage and hour laws.
A year and a half later, the agency filed a complaint in federal district court, alleging that the topless dancers--deemed independent contractors by Cabaret Royale--are, in reality, employees who should be getting at least minimum wage from the gentleman's club.
The suit, still pending in Judge Joe Fish's court, alleges that Cabaret Royale owes $11 million in back pay to dancers and some waitresses. The Labor Department also contends that the club doesn't keep accurate records on how much its employees actually earn.
Tim Millard, Cabaret Royale's director, maintains that the arrangement benefits the dancers more than the club. The lawsuit, he says, is malicious.
"The DOL is targeting an industry it doesn't like," he says. "It's ridiculous for the Department of Labor to be concerned about someone who can earn hundreds or thousands of dollars in a club making $4.25 an hour."
The $11 million figure for back wages, he adds, is grossly incorrect.
Judge Fish, however, ruled in 1992 that the Labor Department was right to consider Cabaret Royale's dancers employees. The court will now determine whether Cabaret Royale's waitresses have been paid minimum wage.
Labor Department officials say the lawsuit could have a profound effect on the entire topless industry. Most topless clubs deem their dancers independent contractors; forcing the nightclubs to pay minimum wage would pose an enormous financial strain.
Millard insists today that Cabaret Royale won't suffer if required to pay minimum wage--even though the club's accountant, Jeffrey Bugenhagen, had testified in court that the move means the topless club would "stop operating at marginal profitability and immediately start operating at a loss."
Cabaret Royale and the Labor Department are negotiating a settlement on the back pay, Millard says.
At the same time, the club is trying to shake off a series of pesky--and potentially costly--individual lawsuits, such as the one filed by Ann Marie "Ami" Lindsey, a former Cabaret Royale head waitress who sued for discrimination after club managers turned down her request to dance, saying the 40-year-old woman was too old.
Another 40-plus former head waitress, Linda York, joined the suit when Cabaret Royale fired her. The women are seeking a total of $2.5 million in damages; an appeals court overturned a lower court's order to dismiss the case.
The lawsuit has dragged on for years and stalled indefinitely when Izzedin filed for bankruptcy on behalf of two of the corporations that used to run Cabaret Royale, a move Lindsey says shows the latitude powerful organizations have over their employees.
"Here they are expanding to Mexico and around the world," she says. "And I'm back in Dallas, still waiting six years later for my day in court. This is not justice."
Lindsey and York aren't the only women who've sued the topless club. Two cabaret-style dancers, Chris and Candy Smith, sued for breach of contract after Joe Najjar, the club's vice-president for operations, allegedly reneged on an agreement to allow the women to dance with covered breasts.
Days before the sisters were to perform for a live audience, they allege, Najjar told them the revue was canceled. They could dance topless instead--or wait tables and answer phones. The women sued for $9,000.
Najjar, who now oversees the Mexico City club, did not return phone calls from the Observer.
In 1992, another exotic dancer, Victoria Cher Harris, sued Cabaret Royale, a production company, and a local rancher after falling off a horse during filming of a Cabaret Royale video. The flick showed the women riding horses in slow motion--hair flowing in the wind, skin dewy and pink.
The venture ended in disaster, however, soon after Harris mounted her horse. The creature immediately headed for a low-hanging branch--and popped the dancer off her saddle. Harris suffered a severe concussion, bruises, and cuts and later sued for $25,000 to recover medical expenses.
Cabaret Royale officials dismiss all of the lawsuits as frivolous and have employed a host of lawyers to contest them. "They're nonsense lawsuits," Millard says. "It's a case of suing anyone you can. It's not hard to get the address of the courthouse."
In May, Salah Izzedin filed bankruptcy for two Cabaret Royale-related corporations, Prive and Priba. The bankruptcy stalled the lawsuits for the moment and turned the focus to the club's assets. The bankruptcy filing means that, even if people suing Cabaret Royale win their lawsuits, the nightclub may not have to pay a dime--because Izzedin insists Prive and Priba were broke at the time of dissolution.
Since declaring bankruptcy for Prive and Priba, Cabaret Royale officials have striven to separate the two companies from the famous nightclub. Prive and Priba were only operating Cabaret Royale, attorney Jack Gillis says. They were not Cabaret Royale itself.
"The club was not being operated to [Cabaret Royale Corporation's] standards," Gillis says, "And the lease was terminated."
Gillis and Millard also contend that Salah Izzedin has little influence on the new, improved corporations running Cabaret Royale.
"Izzedin doesn't own Cabaret Royale," Gillis says. "It's a publicly traded company. What he does for a living these days, I couldn't tell you."
What Gillis and Millard fail to point out is that Izzedin, through his Oceanic Oil Corporation, has a controlling interest in the topless club's new parent company, Cabaret Royale Corporation. And his sister Leila Izzedin is president of CRC Dallas Food and Beverage Operating Corporation--the corporation that replaced Prive and Priba, according to Securities and Exchange Commission filings.
Cabaret Royale is further entangled in the Izzedin family through the Fuoad Izzedin-controlled limited partnership that supposedly fired Prive and Priba, Walhill Partners Limited, which transferred its assets to a Delaware "shelf" company in September of 1993, according to SEC records. The "shelf" company, which changed its name to Cabaret Royale Corporation after the transfer, had been incorporated on paper for years but wasn't doing business.
After the transfer of assets, Cabaret Royale Corporation applied to trade its stock on the NASDAQ and Boston stock exchanges--the latter under the symbol GIRL.
The bankruptcy trustee is now investigating whether assets have been illegally transferred from one Izzedin corporation to another to avoid paying creditors.
"We are still reviewing the records because there are no physical assets we've been able to locate," says Daniel Sherman, the trustee assigned to the Prive and Priba bankruptcy case. "We're reviewing possible transfers to see if any one of them can be reversed."
If the bankruptcy court shows the corporation received nothing in return for transferring money or property, then the court can claim the property for creditors, Sherman says.
Sherman says the high number of corporations controlled by the Izzedin family makes Cabaret Royale's case extremely hard to unravel.
And while Cabaret Royale has always made loads of money, it has also required big bucks to operate. Bankruptcy records reveal that while the Cabaret Royale nightclub in Dallas grosses between $5 and $7 million a year, its operating budget leaves the club with less than $100,000 in net income.
Millard strongly denies suggestions that the Izzedin family or other owners of Cabaret Royale-related corporations shifted assets to avoid creditors. He says Cabaret Royale is able to expand because of new capital obtained through its public stock offering.
The bankruptcy investigation is ongoing. Meanwhile, Ami Lindsey's attorney, William Isbell, is fighting in court to get other Cabaret Royale-related corporations linked to the two bankrupt entities. In addition to bankruptcy, Isbell says, the case is stalled because Cabaret Royale officials have balked at turning over corporate financial information.
Millard says the company has not made available its financial records because it believes the lawsuits are trifling.
Unusual circumstances have also contributed to delays in getting the information to the bankruptcy trustee. Three weeks after Cabaret Royale transferred assets to its public company, the nightclub's longtime accounting firm, BDO Seidman of Dallas, resigned. Cabaret Royale officials later took great pains in the firm's quarterly report to assure shareholders that the defection wasn't a result of questionable business practices.
"To the best knowledge of [Cabaret Royale Corporation], the accountant's past reports on the financial statements have not contained any adverse opinion," the latest 1994 quarterly report stated.
Then two weeks before Cabaret Royale officials were to turn over the club's financial books to the bankruptcy court, Cabaret Royale night auditor John Christhilf, 48, was found dead from a gunshot wound to the head in the Dallas nightclub's management offices. A cleaning crew found Christhilf's body face-down on the floor at 3:30 a.m. on July 5.
When a medical investigator turned over the body, he found Christhilf's tie used as a gag. The medical examiner's office ruled the death a suicide, noting that Christhilf had been paraplegic since a car accident in 1993. The gun, a .38-caliber revolver kept in Cabaret Royale offices--according to the medical examiner's report--was found at Christhilf's feet.
"There are no clear cut indications that the establishment was robbed," Medical Examiner's investigator Eric Rosenstrom reported. Police found a large quantity of cash inside the office, and noted that none had been taken from Christhilf's wallet.
Police believe Christhilf--who was also a financial director for Boy Scouts of America--gagged himself to make his death look like murder.
Christhilf's death led to insinuations of foul play at Cabaret Royale, Millard admits, even though Christhilf only dealt with night receipts and didn't work in the company's accounting office.
"I wish everyone would just leave the poor dead man alone," he says. "He was a well-respected employee who was qualified to do his job. For whatever reason, he wanted his death to appear like a homicide. But he certainly wasn't very skilled in making it look that way."
As the year ends, the creators of illusion see brighter prospects ahead. Millard and Bird are optimistic that Cabaret Royale's legal woes are minor setbacks to Salah's dream of a worldwide topless network.
The next step, Millard says, is producing "premium cable broadcasts. And a myriad of media-oriented ventures...If and when we get into media activity, it will be based on the club network. They're big plans, but we are going to do it."
These are exciting times for Cabaret Royale and the inestimably ambitious Izzedin. In the past few months alone, the Dallas topless enterprise has played host to two British television crews, a German broadcast group, and a Finnish film crew.
"We are actively pursuing projects from major U.S. cities to the Far East," Millard adds. "What we are trying to do is take a less than acceptable business and make it into one that has gained acceptance."
Things are so hectic, Millard can scarcely afford to take time out to quash rumors that Cabaret Royale is going bust.
Cabaret Royale and the Izzedin family will continue forging ahead, he says--while the Labor Department pursues its $11 million case, while Lindsey's lawyer connects the dots among Izzedin's numerous corporations, and while the bankruptcy court sifts through a labyrinth of Izzedin corporations for hidden assets.
Meanwhile, Leila Izzedin remains behind closed doors, politely shunning requests for interviews. Fuoad Izzedin, known as The Professor, occasionally emerges from self-imposed obscurity to strengthen the notion that Salah is not the network's leader. And Salah Izzedin remains out of reach, reportedly shuttling from country to country in search of exotic club locales and rich investors excited by Cabaret Royale's high concept.
Only Playboy has ever had it so good.
