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Friday, July 03, 1998
Debbie Reynolds resort headed for auction block
Associated Press
Debbie Reynolds' performing days at her resort may be over now that the troubled hotel-casino is going on the auction block next month.
Todd Fisher, Reynolds' son and the resort's chief executive, said there are no plans to close the off-Strip resort.
For sale are the resort's 193-room hotel and casino, which includes a 500-seat showroom, and the 6-acre site upon which it sits. The assets will be auctioned as a whole unless a minimum bid offer -- in the $10 million range -- is not met.
Not included in the auction is the Hollywood Motion Picture & Television Museum, which is owned by a separate company that pulled its assets out of the Debbie Reynolds in May.
The resort has received two pre-auction bids of $14 million, but both carry heavy restrictions, Fisher said. Fisher highly doubts an acceptable preauction bid will be made.
Reynolds is willing to negotiate licensing her name to the resort's buyer, but if the buyer isn't interested, her association with the resort will end, Fisher said.
The Debbie Reynolds resort declared bankruptcy last July, after ILX Inc., a Phoenix-based time share developer, backed out of a $16.8 million acquisition offer. At the same time Debbie Reynolds, who owns 26 percent of the company's stock, declared personal bankruptcy. Reynolds had guaranteed a $1.1 million loan obtained by the resort in early 1997 to hold it over until after the ILX sale.
After declaring bankruptcy, the resort reached a $14 million acquisition agreement with Florida time-share developer David Siegle. But Toledo, Ohio-based Calstar LLC made a competing offer in bankruptcy court in April, forcing Siegle to up his offer to $15.6 million.
Siegle -- who had planned to add 1,000 new time-share rooms to the resort -- dropped his bid in May after deciding that $15.6 million was $1.6 million more than the Debbie Reynolds was worth. Siegle's departure let Calstar step in as buyer with its $15.5 million backup offer.
In June, Calstar backed out of its offer, citing environmental concerns with the property.
The Aug. 5 auction will require interested bidders to place a deposit of $500,000. The winning bidder must pay 20 percent of the bid price at the time the bid is placed. A backup bid will be allowed, Fisher said.
A recent appraisal found the resort's assets to be worth $18 million, Fisher said.
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