Mob Experience at Tropicana files for bankruptcy
- Story of embattled Mob Experience fit for ‘The Sopranos’ (10-17-2011)
- Tropicana sued again over Mob Experience work (10-12-2011)
- Mob Experience faces new lawsuit over unpaid bills (9-28-2011)
- Mob Experience saga grows more bizarre with supposed threat (9-28-2011)
- Struggle escalates for control of Las Vegas Mob Experience (9-23-2011)
- Judge orders accounting of Mob Experience finances (9-21-2011)
Capone. Giancana. Lansky. Spilotro.
These and other big names in the mobster world were back in court in Las Vegas on Monday — but not in a criminal sense.
Rather, their heirs showed up as creditors in the bankruptcy filing of a museum and interactive exhibit built around their legacies at the Tropicana resort, which has its own mob legacy dating to the days before corporations took over Las Vegas.
The Las Vegas Mob Experience, as expected, voluntarily filed for Chapter 11 bankruptcy reorganization Monday. It's in no way connected to what's perceived to be the better-funded Mob Museum opening next year in downtown Las Vegas.
Besides filing for bankruptcy, the Las Vegas Mob Experience immediately revealed an insider-driven plan to sell itself to a company headed by an existing investor for about $2 million.
The investor is John Vipulis and his company, JVLV Holdings LLC, has also agreed to immediately loan The Experience up to $375,000 so it can survive while it works its way through the bankruptcy process. In total, his company anticipates putting up $4 million to buy The Experience and cover future operational experiences — should his plans be approved by the bankruptcy court.
This debtor in possession financing deal likely will be aired in U.S. Bankruptcy Court for Nevada during the next few days, along with routine "first day’’ motions in which The Experience will ask the court to pay ongoing expenses like utilities and to continue paying its employees.
The prepackaged bankruptcy financing and sales plan is likely to face scrutiny by investors and creditors since they face steep losses — The Experience’s liabilities top $10 million vs. less than $500,000 in assets, bankruptcy records show.
Court records show The Experience’s equipment, props and inventory are valued at between $250,000 to $500,000 while ownership of many of the mob artifacts there is disputed.
Among The Experience creditors are family members of mobsters whose artifacts are included in The Experience. Some may see their consulting deals with The Experience canceled, which wouldn’t be a shock since they haven’t been getting paid anyway.
The Experience’s landlord, the Tropicana on the Las Vegas Strip, is on board with the sales plan so it likely has the inside edge over any competing plan that may emerge. The Tropicana for months has had the authority to evict The Experience over unpaid rent but has not done so in hopes new management and capital would turn the tourist attraction around.
Monday’s bankruptcy filing was expected after the owner of The Experience, Murder Inc., was hit with multiple lawsuits over unpaid bills and its investors fought amongst themselves over its declining finances.
Under Chapter 11, companies continue to operate and can propose a plan of reorganization. Creditors will have the right to support or oppose The Experience’s sales plan or file their own plan or plans.
Records show key creditors in the bankruptcy case are M.J. Dean Construction Inc., general contractor for The Experience, owed $4.6 million; Strategic Funding Source, owed $4 million; GC-Global Capital Corp., owed $2.7 million; and Vipulis’s company JVLV Holdings, owed $2.25 million.
Detailed financial information was not provided in the initial bankruptcy filing but VEGAS.com, Las Vegas Magazine and Las Vegas Weekly — sister companies of the Las Vegas Sun and VEGAS INC — appear on the creditor list.
Lawsuit records say that at times, VEGAS.com sold tickets to The Experience but then withheld some of the proceeds from The Experience to cover past-due advertising bills from Greenspun Media Group, owner of Las Vegas Magazine and Las Vegas Weekly.
In addition, the Sun has been in a deal in which it provides content to The Experience in exchange for brand placement.
Louis Ventre, manager of The Experience, recounted in a court declaration how he and Experience developer Jay Bloom raised some $13.559 million in secured and unsecured debt from private lenders for The Experience — not counting the $4 million owed to Strategic Funding Source.
Yet, at last count, The Experience was running on fumes as it had, as of Monday, just $6,125 in its operating and payroll account; $2,964 in card receipts in process and $3,587 in cash.
Where all the money went is an issue that likely will be litigated extensively in and out of bankruptcy court, with Bloom and Ventre each accusing the other of looting the company.
Bloom says he voluntarily gave up management of the company and put most of his equity into escrow this summer as part of a plan in which some $5 million would be raised for The Experience. That money wasn’t raised and Ventre and certain creditors say Bloom was forced out after lawsuits over unpaid bills piled up.
Ventre said in his declaration that it’s critical that the company quickly emerge from bankruptcy and reopen the closed interactive portion of The Experience, which he says was idled after Bloom's departure when its audio-visual equipment was repossessed.
The Experience is now visited by some 130-150 people per day paying $15 for tickets vs. 400 per day when the interactive portion was open and tickets went for $29.95 per day, he said. Overall, visitation numbers never met expectations after The Experience opened this spring.
"In order to obtain additional capital, the Las Vegas Mob Experience must quickly emerge from Chapter 11. Languishing in Chapter 11 while the debtor's creditors engage in protracted inter-creditor disputes will not only irreparably harm the debtor's ability to reopen The Experience and increase its revenue for the benefit of its creditors, but will cause Tropicana to refuse to enter into a modified lease with the debtor, thereby requiring the debtor to reject the Tropicana lease (meaning it would voluntarily vacate or be evicted). In that event, liquidation would be the only alternative,’’ Ventre said in his declaration.
"The Las Vegas Mob Experience remains a viable operation. While the initial projections of income and debt obligations were flawed, the Las Vegas Mob Experience can be restructured so that its revenues exceed its operating expenses while providing some repayment to its creditors,’’ the declaration says. "However, in order to achieve positive cash flows, The Las Vegas Mob Experience must (1) renegotiate the lease with Tropicana, (2) drastically reduce its secured and unsecured debt, including eliminating its obligation to pay a significant portion of its gross revenues to creditors pursuant to income assignments, (3) reject consulting agreements that are unnecessary and provide no benefit to The Las Vegas Mob Experience and (4) reopen the interactive experience component of The Las Vegas Mob Experience.’’
The Mob Experience bankruptcy was filed by attorneys with the law firm Gordon Silver.