The former owner of Binion’s has found itself caught up in the new owner’s quagmire over lease agreements for the casino property.
West Virginia-based MTR Gaming Group Wednesday filed a lawsuit Wednesday against TLC Casino Enterprises, saying the company has failed to pay all the rents due to landowners who own the land underneath the downtown casino. Under the purchase agreement that saw MTR sell Binion’s for $32 million in January 2008, TLC is responsible for paying the rents. MTR, however, is a guarantor for the lease agreements.
The purchase price for Binion’s covered the buildings and some of the land. At least four of nine parcels under the main casino and hotel property are owned by outsiders who charge Binion’s owners rent.
TLC “shall promptly pay all rents ... and not suffer a default or take any other action under any such lease that will result in a claim against” MTR by the landlord, the lawsuit, filed in Clark County District Court, said.
MTR received a letter from one of the landlords July 1 stating that TLC was in default on a base rent obligation of $125,000 per month. Two weeks later, MTR received a letter from a second landlord holding a $6,720 per month lease.
MTR paid both parties a combined $30,000 to prevent the company from being liable for the lease obligations through March 2010. TLC has not repaid the money, according to the lawsuit.
The lawsuit said the breach of the two lease agreements has caused MTR $1.08 million in damages.
The Review-Journal reported on May 6 that TLC owner Terry Caudill, who also owns the Four Queens, has been trying to renegotiate the lease amounts to reflect current market values for the land.
Landowners filed a lawsuit in Clark County District Court on April 30, alleging TLC violated its lease terms.
The company said in a March letter to landowners that it is unable to generate a positive cash flow at Binion’s under the current agreements.
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.