Judge OKs plan for Landry’s to operate Eva Longoria’s Beso restaurant

A bankruptcy judge on Wednesday approved a plan in which restaurant and casino operator Landry’s Restaurants Inc. of Houston is bailing out Eva Longoria’s Beso restaurant in Las Vegas.

Judge Mike Nakagawa, a day after a contentious hearing on the issue, signed off on the plans in which Landry’s will run the restaurant until it’s sold and advance it up to $300,000 to keep the struggling business afloat until it’s sold.

Landry’s hopes to buy Beso for $1 million plus whatever it spends to keep the business operating in the interim.

Nakagawa in his order acknowledged dissident investors in Beso claim this is sweetheart insider deal for Longoria because she’ll have an ownership stake in the Landry’s-led entity that will try to buy Beso out of bankruptcy.

But the judge said the driving force in the bankruptcy is the landlord’s willingness to let Landry’s take over, even though it could evict Beso at any time because Beso is $3.375 million behind on rent – with $1.3 million of that accumulated since the January bankruptcy filing – and the lease has not been extended.

The landlord is the high-end Crystals shopping mall at CityCenter on the Las Vegas Strip, an MGM Resorts International development.

The dissident investors haven’t shown they can immediately come up with $1.3 million to bring Crystals current on the back rent that has piled up since the bankruptcy, Nakagawa wrote in his order.

"In every meaningful way, Crystals virtually controls the outcome of this Chapter 11 proceeding," Nakagawa wrote in his order. "In order to keep the debtor’s business operating with Crystals’ consent until a sale can be considered, the interim financing offered by CHLN (a Landry’s subsidiary) is an actual, necessary cost of preserving the bankruptcy estate."

The judge’s order sets up a process where 50 to 60 jobs will be preserved and Landry’s will have the opportunity to bid for the business at a hearing that has yet to be scheduled, though other investors will have an opportunity to bid as well.

Landry’s, known for owning some 350 restaurants, has told the court that with its management expertise and pricing power with vendors it’s confident it can turn Beso around.

That may be a challenge as the business had lost $670,000 this year through June. The company, previously managed by Longoria’s accountant, this summer closed its money-losing Eve nightclub and was on the verge of closing the restaurant before Landry’s stepped in early this month.

Landry’s, known in Las Vegas for owning restaurant chains such as Landry's Seafood, Claim Jumper and the Rainforest Cafe, is also known for owning the Golden Nugget casinos in Las Vegas, Laughlin and Atlantic City.