Mahana Estates Winery is about as close to paradise as a person can get on Earth.
With more than 50 acres of vineyards on the New Zealand coast, it features a restaurant, art installations and a setting so enchanting Prince Charles had to stop there on his 2015 visit to the country.
It’s also been the scene of a bitter feud involving three casino moguls -- former friends -- who put money into the winery.
Jim Murren, the chief executive officer of MGM Resorts International, and Dan Lee, CEO of Full House Resorts Inc., both investors in Mahana, sued their friend Glenn Schaeffer, the former president of Mandalay Resort Group and managing partner at the winery. The pair claim Schaeffer misled them into thinking they actually owned a stake in the business and squandered their money. Schaeffer said Lee threatened to kill him, and his dogs. Lee said he was joking.
Last month, a court in New Zealand sided with Murren and Lee, awarding them $2.3 million, plus interest.
The saga of Mahana, which means warm place in Maori, the local indigenous language, shows that business investments can spoil friendships, even among the wealthiest and most successful of individuals. Today the winery is closed and in the process of being sold to a new owner for not much more than the debt owed against it. The one-time buddies aren’t speaking to each other -- although Schaeffer said he’d still talk to Murren.
“It’s the story of a very good friendship gone bad,” Murren said.
The relationship between the three goes back decades. When Lee left his job as a casino analyst at First Boston to take a position in finance at Mirage Resorts in 1992, he lived just two doors down from Schaeffer, who helped run an empire that included the Luxor, Circus Circus and Mandalay Bay resorts. Murren, another former Wall Street analyst and chief financial officer at MGM Grand at the time, joined the posse. The three vacationed together with their families, collected art, and drank fine wine.
Schaeffer and Murren even hatched the $7.9 billion sale of Mandalay to Mirage in 2005 over a bottle of Woollaston New Zealand pinot noir. After the final terms were reached, Schaeffer and Murren hugged each other, according to “Winner Takes All,” a 2008 book about the casino industry.
By then, Schaeffer had already convinced Murren and Lee to back him in the winery. He pitched it as an opportunity to buy vineyard land cheaper than in the U.S. and as a currency hedge against the weaker New Zealand dollar, according to Lee. Bankers from Bank of America Corp. also invested. In the end, Murren put in $1.6 million and Lee, $700,000, over a series of years.