Lord of the Fly

Every weekend the pace was the same, so much so that Kahn imposed a five-dollar cover charge in an attempt to keep the crowds manageable and generate much-needed revenue. Kahn referred to the Dragonfly as a five-star restaurant, but Dallas restaurant critics ripped the place apart, belittling its badly formulated and executed menu and its makeshift jazz stage that made dining clumsy. The place reverberated with noise, but bad food and jarring sounds didn't stop the crowds drawn to its bristling singles scene from coming. The space was perpetually plugged with Dallas beautiful people--scantily clad and fearlessly forward.

But as the Dragonfly swelled with success, the struggle for control of it intensified. Dissatisfaction with Kahn was running at a fever pitch among many Dragonfly investors. "I had doubts of ever seeing my money out of it with him in charge," says one limited partner who spoke on the condition of anonymity. "There was a lot of smoke, but no fire; a lot of suspicion, but not necessarily hard evidence. Any hard evidence that should have existed was covered up by sloppy records and bookkeeping."

In late September, Norman and Priebe played on this discontent, embarking upon a scheme to secure the proxy votes of two other investors to remove Kahn as general partner and put Norman's CCMN Inc. in his place. To secure a majority of votes, Norman and Priebe had to guarantee to buy the two investors' shares once Kahn was removed.

On September 28, with the necessary proxy votes in hand, Norman went to the Dragonfly and slapped Kahn with a notice of removal as general partner. The only problem was, Kahn refused to leave, laughing at Norman's attempt to fire him. Then he called the police, telling them that Norman was no partner of his, but a trespasser; he demanded that she be arrested. As proof, Kahn showed the police the Dragonfly lease, which bore his name as tenant. Not wanting to involve themselves in a civil matter, the police let Norman off with a criminal trespass warning and told her to leave. Norman had no choice but to pursue her remedy in court.

However, state District Judge David Godbey short-circuited her next attempt to evict Kahn by forcing the case into mediation. Norman and Kahn reached a settlement whereby he would buy out her interest. Terms included a down payment of $35,000 due November 9, followed by monthly payments of roughly $8,700 per month for 24 months. But when Kahn failed to produce a final settlement draft or make any payments, Norman hunkered down for their fiercest round of sparring yet.

On December 22, Charlott Norman again moved against Steve Kahn, this time in the form of a crude corporate takeover attempt. Armed with documents proving she was now the general partner of the business operation, Norman hoped to physically seize the Dragonfly premises.

Accompanying her was Santiago Pena, who had fallen into a financial black hole because of Kahn. He says he is owed more than $120,000 from his Dragonfly labors and more than $78,000 for his work on the Ocean Club. He even cites the emotional turmoil created by his association with Kahn as the cause for the breakup of his marriage. Small wonder he joined forces with Norman by providing her with his key to the nightclub. But exactly what happened after their entry is still the subject of much dispute.

Ask Dragonfly chef Erick Chavez and Steve Kahn, and they will say that at 7:30 a.m., Norman and Pena ripped the side door of the restaurant off its hinges and forcibly made their way inside, tripping the security alarm in the process.

When Kahn and Chavez arrived at roughly 7:45 a.m., they claim, they found the intruders, joined by "three or four other individuals, looked like biker kind of individuals, long hair, tattoos, people of that nature." Chavez says the biker gang immediately took over the place, terrorizing them by brandishing guns, knives, and other weapons. Both Kahn and Chavez claim they asked the group to leave, a request they refused. So Kahn called the police.

Norman's and Pena's accounts of the day differ considerably and are partly substantiated by police reports, which make no mention of a forced entry or any bikers assaulting Kahn and Chavez with weapons. However, their entry did trigger the security system, and the police were called to the scene, followed by Kahn and Chavez. When Kahn insisted the officers arrest Norman and Pena for breaking and entering, they refused after Norman produced paperwork proving she was a partner. Before the police left, they asked whether anyone was armed.

Pena said he was and produced a valid carrying permit. Whereupon Kahn demanded that he be allowed to carry a gun as well. Since he was ostensibly on his own premises, the cops gave him the OK, says Pena, and "Steve ran out to his truck and grabbed a gun and came back and was putting the gun in the front of his pants there, and walked around with it like that." Norman would later secure a gun from her car--but only for protection, she says