Bankruptcy Judge Linda Riegle concluded the first chapter of the Lake Las Vegas bankruptcy saga, but readers may find some of the next few chapters even more interesting.
Riegle approved $127 million in post-bankruptcy financing for the 3,600-acre luxury Henderson community on Tuesday, despite complaints that $49 million of the money will go to pay pre-bankruptcy claims of some creditors. The judge accepted the argument that Credit Suisse, which arranged the syndicated loan, was the only source for financing for the project, particularly given the real estate recession.
Next, creditors are looking forward to asking questions about Lake Las Vegas at an Aug. 22 meeting at the Foley Building.
Observers, for example, express interest in the relationship between investment banks and Atalon Group, which became the owner of Lake Las Vegas after the previous owners defaulted on loans.
The most interesting chapter is likely to unfold when Lake Las Vegas starts identifying assets and possibly filing lawsuits to recover more assets.
Nothing in the bankruptcy case record indicates that the debtors will pursue lawsuits against the previous owners or others.
However, Frederick Chin, chief executive officer of Lake Las Vegas, filed a written statement in bankruptcy court, outlining a series of controversial events that could be the subject of lawsuits.
Chin criticized former Lake Las Vegas owners Ron Boeddeker, owner of Transcontinental Corp. of Henderson and Santa Barbara, Calif.; and Sid and Lee Bass, billionaire Texas brothers.
Boeddeker was reported to be traveling and unavailable for comment. The chief financial officer for Sid Bass, who declined to give his name, said the Bass family doesn’t comment to the media.
In 2004, the previous owners pulled $470 million from Lake Las Vegas, leaving the project with too little money “to achieve its business plan,” according to Chin. This represented a large portion of money that Lake Las Vegas had borrowed from a group of lenders organized by Credit Suisse, a Wall Street firm.
Chin said that the previous owners agreed to turn over the property to Chin’s group in January if the previous owners failed to refinance. The previous owners failed to refinance the property, but Chin said Transcontinental executives ordered workers to destroy computer data, e-mail and three garbage cans of paper documents about previous operations in December 2007.
Chin questioned a deal by previous owners to turn over all of the revenue of the Falls and Reflection Bays Golf Courses to Carmel Land & Cattle Co. while Lake Las Vegas was responsible for $1 million in monthly expenses for operation of the courses. Carmel Land, Chin noted, is owned by William Hall Jr., a founding partner of the Fort Worth law firm that has long represented the Bass Family — Kelly Hart & Hallman.
The previous owners sold Matt Boeddeker, the son of Ronald Boeddeker, a parcel for $247,000 per acre in 2007 although Lake Las Vegas paid the previous owners of the parcel, John and Evonne Allen, for $799,000 per acre the previous year.
Lake Las Vegas Joint Venture and five related companies are in Chapter 11 bankruptcy, which allows companies to reorganize their debts and emerge from bankruptcy as ongoing businesses. Lake Las Vegas hopes to emerge from bankruptcy in 300 days.
Contact reporter John G. Edwards at email@example.com or 702-383-0420.