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Castaways Loan Approved27 June 2003
by Jeff Simpson
LAS VEGAS --Castaways lawyers on Thursday filed for Chapter 11 bankruptcy protection from its creditors, and a federal bankruptcy judge allowed the Fremont Street property to borrow an additional $1 million in order to keep its doors open.
Lawyers listed total debts of between $50 million to $100 million, owed to more than 200 creditors.
If Judge Linda Riegle hadn't approved the loan from USA Capital over the objection of Vestin Capital, Castaways lawyers and bosses said they'd have to close the property and its 830 workers would be out of work.
Castaways lawyers said the property was severely affected by the Sept.11, 2001, terrorist attack-related tourism slowdown as well as economic recession, but could reverse recent fortunes wit bit more time and money.
"Unless the court approves the (loan) today, this company can't operate and will cease to exist," Castaways lawyer Gerald Gordon told Riegle, presiding by speaker phone from a judicial conference in Hawaii.
Retired bankruptcy Judge Bert Goldwater, 89, also monitored the proceeding by speaker phone and signed the court's orders in Reno.
Castaways owes Vestin about $20 million, money Vestin lawyer Candace Carlyon told the judge would be put at risk if USA Capital was awarded first priority for repayment, ahead of Vestin's mortgage note.
Riegle set a second emergency hearing on the case for 1:30 p.m. on July 16.