Judge OKs reorganization plan for Lake Las Vegas
The 3,600-acre Lake Las Vegas development is getting a second chance to succeed after two years in bankruptcy.
Bankruptcy Judge Linda Riegle on Monday approved a reorganization plan that wipes out old debt and gives the luxury community a chance to rebound. The resort community is built around a man-made lake in Henderson 14 miles east of the Strip and features million-dollar homes, including one owned by singer Céline Dion.
As part of the bankruptcy reorganization plan, Credit Suisse, the investment bank that was Lake Las Vegas' biggest creditor, agreed to accept equity in the resort community. The Wall Street firm provided debt financing for Lake Las Vegas before and after the community filed for bankruptcy in July 2008.
The development, which will continue to be managed by the Atalon Group, also gets a $30 million line of credit to pay for continuing operations.
Builders who previously were sold lots without easements and lot lines will get those improvements so that they can build homes on undeveloped land at Lake Las Vegas.
"I'm very excited about what this does for the future (of Lake Las Vegas), and I'm certainly proud about the role our firm has had in getting this wonderful resolution," said McDonald Carano Wilson attorney Kaaran Thomas, who represented the official committee of unsecured creditors.
In a statement, Lake Las Vegas Chief Executive Frederick Chin said, "I am excited that we will now be able to focus all of our efforts on continuing to create an environment in which the community will grow and prosper and the real estate market recover."
Henderson City Council member Debra March also was encouraged.
"We're pleased that there's a work-out plan in place that allows development to go forward," she said.
March was optimistic that two closed golf courses at Lake Las Vegas would be reopened.
"This will make it a destination resort again," she said.
A third course, the private South Shore Golf Club, remains open.
Calls to other Henderson officials were referred to the public information officer, who did not comment.
The four-diamond Loews Lake Las Vegas Resort welcomed the news, spokeswoman Jennifer Duffy said.
"Our booking pace is up, year over year," she said without disclosing occupancy percentages.
The Ritz-Carlton Lake Las Vegas, however, closed in May. The Casino MonteLago closed in March.
The bankruptcy reorganization plan represents potentially bad news for the estate of Lake Las Vegas developer Ronald Boeddeker, who died Saturday, because a trustee was named to sue over the diversion of part of a $560 million loan made to Boeddeker's Transcontinental Corp. when it owned the development in 2004. The Bass family interests of Fort Worth, Texas, also were owners of Lake Las Vegas.
In late 2009, Chin filed bankruptcy papers criticizing Transcontinental for pocketing $470 million of the amount.
Credit Suisse arranged the loan and also a postbankruptcy loan of $127 million. The investment banking firm agreed to accept equity in place of the postbankruptcy loan and the previous loan.
The bankruptcy reorganization plan sets aside $1 million for a group of creditors owed $20 million. In addition, those creditors are entitled to 10 percent of any recovery made through lawsuits against Transcontinental and others.
Contact reporter John G. Edwards
at jedwards@reviewjournal.com or 702-383-0420.
