Judge signs off on LVH casino takeover
9 January 2012
A state judge has approved an agreement in which a receiver will be put in charge of the former Las Vegas Hilton, including its gaming operations.
The 2,950-room Paradise Road property defaulted on its $252 million mortgage last year and was hit with foreclosure proceedings by lender — and hotel investor — Goldman Sachs, in September.
Goldman Sachs has been pressing in court for the right to have a receiver run the property until it’s foreclosed on, something majority owner Thomas Barrack initially opposed.
Clark County District Court Judge Elizabeth Gonzalez on Dec. 14 approved the appointment of longtime gaming executive Ronald Johnson as receiver, but only for the nongaming operations of the property now known as LVH — Las Vegas Hotel & Casino.
That was after Barrack, the billionaire chief of Los Angeles-based investment company Colony Capital LLC, testified it would be untenable for him to have Johnson operate under his gaming license while he had no authority over Johnson’s actions.
But the Nevada Gaming Commission on Dec. 22 approved plans for Johnson to operate the casino under the existing gaming license.
The Gaming Commission decision sent the issue back to Gonzalez’s courtroom, where Goldman Sachs and LVH owner Colony Resorts LVH Acquisitions LLC last week announced they had agreed Colony Resorts would stop fighting the receivership effort — but with conditions.
The receivership order signed Friday by Gonzalez includes protections for workers, requiring the receiver to seek court approval before initiating any mass layoffs as defined by the federal Worker Adjustment and Retraining Act.
“That’s important (for the employees), going into the new year,” said Las Vegas attorney Erika Pike Turner of the law firm Gordon Silver, who represented Colony Resorts LVH and Barrack.
Goldman Sachs hasn’t yet disclosed plans for the LVH once it’s foreclosed on such as whether the property will be folded into the Goldman Sachs-owned American Casino & Entertainment Properties LLC, owner of the Stratosphere; or sold to some other party.
After enduring years of losses at the Hilton during the recession, Barrack testified last month his company had lost all its equity in the property.
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