By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
Watters has also filed two divorces in Harris County, and was a third party to yet another divorce. In that case, he declared paternity for the child of Tammara Brasher, now his third wife. (The child was born in Hawaii, where Watters took a sabbatical of sorts and started writing a science-fiction novel.)
Watters seems to relish the strategic maneuvers involved in legal tangles, though occasionally those machinations reveal his blind spots. In 1989, for instance, Watters and Fontenot marched a dozen Rick's dancers into court. State District Judge Mark Davidson was navigating a thicket of mismanagement accusations against the club, and the partners hoped to convince him not to appoint a receiver.
On the stand, a pretty teenager testified that if the court forced Rick's into receivership, she would pass up the thousands of dollars she made dancing topless each week rather than work for anyone but Watters and Fontenot. The dedicated employee told the court that she would consider finishing high school instead.
Not surprisingly, the judge was not swayed. He appointed a receiver, and it is unknown whether the dancer returned to school.
So went just one chapter in one of the longest of the Rick's-centric lawsuits; it started in 1987 and was finally settled last month. The suit was filed by Vernon Young, who claimed to be a silent but original investor in Rick's, and who wanted a cut of the profits. The allegations included till-skimming and mismanagement of corporate assets. Says one investigator, "I don't know who was stealing from whom or if everybody was stealing from everybody." A report in the court's file indicates that at least $850,000 in cash was skimmed from the club, presumably by three bartenders, in just the eight months auditors monitored.
On St. Patrick's Day 1989, now-state District Judge Michael Wood was put in control of the club. Wood -- who previously acted as the receiver for Gilley's club in Pasadena -- removed Watters and Fontenot from the management of Rick's.
But the pair did not surrender, and in July, the general manager of the club locked Wood out of Rick's. Watters and Fontenot had retaliated by filing bankruptcy for Rick's. It was another ingenious use of the law: because the federal bankruptcy superseded the state action, the unwelcome trial date was postponed and the unfriendly receiver was gone.
Rick's emerged from bankruptcy a few short months later, and the state court appointed a second receiver, Scott Mitchell. Business owners usually detest court-appointed receivers, but Watters apparently liked Mitchell. Years later, Watters made him one of the officers of the new NASDAQ-listed Rick's corporation.
The litigation that brought Mitchell to Rick's showed not only Watters' skillful manipulation of the legal system but also his nerve. Judge Davidson sanctioned Watters and his attorney for, among other things, postponing Watters' deposition on a day that Watters was scheduled to meet Lifestyles of the Rich and Famous host Robin Leach.
Watters was sentenced to perform 20 hours of community service, an obligation he met by combining charitable ends and topless-bar means. First, he spent eight hours familiarizing himself with Cocaine Anonymous and Alcoholics Anonymous, and writing a memo to Rick's employees about the programs.
Second, he used three hours to learn about the End Hunger program and ordering Rick's kitchen to send its extra food to the charity. Third, he spent nine hours arranging for Rick's dancers to gather contributions for Jerry Lewis' muscular dystrophy telethon. In a letter to the judge outlining these "community services," an unabashed Watters also mentioned his support of the Iglesia Misionera Pentecostes -- and even admitted that his motivation was to stymie a competitor, rather than to grow nearer to God.
In 1994, Watters opened Tantra, an after-hours bar. According to Rick's prospectus, Tantra is a "non-sexually oriented discotheque and billiard club." But "sexually oriented" lies in the eye of the beholder.
This April, computer programmer John Hu went to Tantra to unwind after working a night shift. While in the men's room, he thought the chest-high mirror over the urinal was a bit odd. When he came out, he was mortified to find that it was a one-way mirror. Clubgoers were gawking, laughing and making comments like "You're not as big a cowboy as you pretend, are you, fella?"
So says Hu's attorney William Emmons, who sued Tantra and its owner, Rick's Cabaret International Inc., for invasion of privacy, infliction of emotional distress, deceptive trade practices and breach of contract. The defendant responded, shamelessly, that the one-way mirror "adds to the decor and ambiance of the nightclub." The suit is still pending.
Watters has weathered other Tantra-generated woes. This January he was arrested in a police raid because Tantra allegedly lacked a necessary dance hall permit; the case has since been dismissed. The city of Houston also protested the club's liquor permit, though the club seems in no danger of losing its license. But according to the Texas Alcoholic Beverage Commission, the one-way mirror has to go; TABC rules prohibit exposing people's genitals in clubs that serve liquor.
Tantra has actually became more controversial in its neighborhood than the nearby Rick's. It's not just the strange outfits seen on the street the nights of Tantra's S&M Ball, say neighbors. It's having people drinking in cars and roaming the area starting at 2 a.m.