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John G. Edwards
 

Lake Las Vegas seeks Chapter 11 protection

18 July 2008

LAS VEGAS, Nevada -- In one of the potentially largest bankruptcies in Nevada history, Lake Las Vegas, a 3,592-acre residential and resort development in Henderson, filed for Chapter 11 bankruptcy Thursday.

Lake at Las Vegas Joint Venture LLC, one of five related companies filing for bankruptcy, reported debts that total between $500 million and $1 billion and assets that total between $100 million and $500 million. The case could approach other major bankruptcies as measured by the amount of creditor claims.

LLV Holdco LLC, a subsidiary of Las Vegas-based Atalon Group, took over ownership and management of the community in January after previous owners defaulted on $540 million in loans.

The new owners cited "poor liquidity, substantial debt service, (and) extremely challenging real estate market conditions" as reasons for seeking bankruptcy court protection. It filed under Chapter 11, which allows a business to continue operations while seeking to reorganize.

"The decision to reorganize under Chapter 11 in large part reflects our belief that we can reinvigorate Lake Las Vegas as a premier master-planned community," Frederick Chin, president of Lake Las Vegas, said in a statement.

The company said it obtained post-bankruptcy financing of up to $127 million from lenders led by Credit Suisse, a major Wall Street investment banking firm. The financing assures that day-to-day operations will continue without interruption, and employees will continue to receive wages and benefits, the company said.

The company employs 260 workers, mostly for its golf courses. It also has two hotels, a casino and 1,600 completed residences.

The new financing would be used for ongoing operations and assessments related to some obligations, including repairs to the Las Vegas Wash bypass conduit under its 320-acre man-made lake if Bankruptcy Judge Linda Riegle approves.

In the Lake at Las Vegas Joint Venture case, Las Vegas Paving has the largest unsecured claim of $8.5 million. Other top unsecured creditors are Tousa of Hollywood, Fla., Woodside Homes of Las Vegas, local attorney John O'Reilly and Contri Construction Co. of Las Vegas.

Construction of the resort began in 1998. The project includes a 496-room Hyatt Regency hotel and casino, a 349-room Ritz-Carlton hotel and three golf courses, including two designed by the former golf champion Jack Nicklaus. The development surrounds a 320-acre lake created by an 18-story dam.

In April, Lake at Las Vegas affiliate Village Hotel Investors, owner of the first Ritz-Carlton hotel in Nevada, filed for bankruptcy.

John G. Edwards
John G. Edwards