The court order rejects objections from investors tied to the property’s development and clears a major hurdle in the effort to take the downtown Las Vegas property out of receivership. A Clark County District Court judge approved the sale of the Downtown Grand hotel-casino to Vegas Ventures LLC, rejecting objections from investors tied to the property’s development and clearing a major hurdle in the effort to take the downtown Las Vegas property out of receivership.
The court entered its findings of fact, conclusions of law and order approving the sale on Oct. 7, according to public records. The order authorizes court-appointed receiver Paul Huygens of Province LLC to sell substantially all assets of the receivership estate to Vegas Ventures, free of any liens or other legal claims against the property, subject to the terms of the purchase agreement.
The court order does not confirm that the sale has closed, and the purchase price was not disclosed in the filings. Attorneys for the receiver did not immediately respond to a request for comment. As first reported by the Las Vegas Review-Journal in August, Vegas Ventures, a Massachusetts limited liability company managed by Boston developer William “Bill” Keravuori, agreed to acquire the property after a marketing process conducted by the receiver. The company deposited $2.7 million into escrow on Aug. 13, according to the purchase agreement and court filings.
Under the proposed deal, Vegas Ventures intends to assume the existing lease with Fifth Street Gaming LLC, which operates the casino. The buyer plans to select a qualified third-party operator for the hotel, restaurants and other nongaming operations, according to the court filings. The court’s approval follows months of efforts to find a buyer for the hotel-casino, which has been under court-ordered receivership since January after its ownership entities defaulted on a construction loan. The outstanding loan balance now exceeds $105 million, according to court records.
In its order, the court found that the receiver conducted an appropriate sale process and that Vegas Ventures’ offer represented the best available offer to the receivership estate and its creditors. The receiver considered competing proposals, including their terms, contingencies and other factors affecting the value of each bid. No qualified bid exceeded Banc of California’s estimated secured claim, the court found. The bank, formerly known as Pacific Western Bank, holds the senior lien on the assets and consented to the transaction. The court also found that the receiver and Vegas Ventures negotiated the asset purchase agreement at arm’s length, without collusion and in good faith. The sale process was conducted according to reasonable commercial standards, the order states. The ruling addressed objections from limited partners associated with the junior secured lender, an investment vehicle that financed the transformation of the former Lady Luck hotel-casino into the Downtown Grand. Fifteen nonparty limited partners filed a joint objection to the proposed asset sale and requested disclosure and a reserve fund. Three additional limited partners — Ying Zhu, Zhengqin Du and Lixing Gu — filed individual objections, according to the order. After considering the objections and the receiver’s responses, the court concluded that the limited partners lacked standing to object and that their arguments lacked merit even if they had standing.
Sources: Las Vegas Review-Journal
Original reporting: Las Vegas Review-Journal →
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