CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Author Books Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Related News
Recent Articles

Gaming Guru

Rod Smith
 

Closed Casino: Legal Moves Snarl Binion's Deal

10 March 2004

The troubled sale of the Binion's Horseshoe remained mired in more legal maneuvering throughout Tuesday, apparently further complicated by a District Court judge's decision to order a new auction for a tract of land underneath the historic hotel-casino.

Nevertheless, Harrah's Entertainment spokesman Gary Thompson said his company remains optimistic the three-way sale by Horseshoe owner Becky Binion Behnen, which had been set for Tuesday, will close within the next 24 hours.

However, Las Vegas attorney Brian Tanko, who represents former state Sen. Bill O'Donnell, whose successful bid for the land parcel was tossed out during a Tuesday morning hearing, predicted buyers Harrah's Entertainment and MTR Gaming Group will not be able to close on their deal as long as title to the land remains clouded.

District Judge Michael Douglas threw out the results of an auction conducted Friday by probate Commissioner Don Ashworth for a 65.5 percent interest in one of the separate parcels on which the Horseshoe sits.

Douglas ordered a new auction, although Ashworth's office said a date had not been scheduled by the close of business Tuesday.

Chester, W.Va.-based MTR is buying the 52-year-old downtown hotel-casino for an undisclosed price, although company President Ted Arneault said last week the total cost would be about $20 million.

Las Vegas-based Harrah's Entertainment, which negotiated the original deal with Behnen for an estimated $50 million in assumed liabilities, plans to pick up the World Series of Poker and rights to use the Horseshoe brand name in Nevada.

Harrah's is also buying the rights to use the Horseshoe brand name in the rest of the country through its buyout of Jack Binion's Horseshoe Gaming Holdings Corp. for $1.4 billion. That deal was announced in September but is still awaiting regulatory approvals.

Thompson said that despite the title problems, his company still plans to reopen the Horseshoe by April 1 or shortly thereafter and to hold the World Series of Poker there starting April 23. Harrah's will operate under a one-year agreement with MTR with options to extend for another two years.

The planned sale had been scheduled to close Friday, but was postponed when O'Donnell made a $1.184 million offer for an interest in the so-called Parry parcel at the corner of Fremont and First streets, outbidding MTR by $5,000.

O'Donnell's offer was confirmed Friday by District Judge Sally Loehrer, but was contested by Owen Parry's heirs.

During Tuesday's hearing, Douglas told a packed room of attorneys that the only issue to be considered was whether the probate auction had been conducted properly.

The judge, however, threw out his bid after ruling the price for the tract had been incorrectly arrived at because of "mistakes" made in calculating the sale price.

Las Vegas attorney Harold Morse, who represents the Parry estate and Owen Parry's two heirs, said the price should have included $116,000 in back rent plus reimbursement for income, property taxes and closing costs.

He also argued that an agreement with Harrah's called for MTR to buy the entire parcel, not just the 65.5 percent interest, for a total of $1.8 million plus related costs.

Douglas, however, said the authority of the court only extended to the portion of the deal involved in probate.

"Whatever other interests you may have are not of interest to the court," he said. "We don't care what side deals are. We only care about the issues in probate. Upset bidders are allowed to bid (on the portions of the property in probate)."

Tanko argued the auction was lawful and should be upheld because it was based on a verified petition that did not draw any objections from the estate or the Owen heirs.

He argued the court, if the price was found to be flawed, should enter an abatement and adjustment order to correct the price, the normal procedure in real estate transactions.

"Simply because we're dealing with the Horseshoe doesn't mean the court has the authority to apply the law differently," Tanko said.

Tanko said he will have to consult with O'Donnell on whether or not to appeal, which he said would delay the reopening of the Horseshoe, although that had never been his client's intent.

"But for the estate's action and Harrah's, the transaction would have closed Friday," he said.

O'Donnell said he intends to participate in the upcoming auction and looks forward to being a part of the redevelopment of historic downtown Las Vegas.

"Owning a historical part of this city is an opportunity I never thought I'd have," he said.