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Best of Howard Stutz

Gaming Guru

Howard Stutz

Failed Laughlin Casino Deal Sparks Complaints

2 June 2005

LAS VEGAS -- Poster Financial Group and Barrick Gaming Corp. have filed competing complaints in Clark County District Court over a $1 million deposit left in limbo after a deal to sell the Golden Nugget Laughlin collapsed this week.

Barrick, owner of several downtown casinos, agreed in November to pay Poster Financial $31 million for the 300-room, tropical-themed hotel-casino on the Colorado River, but the contract expired Tuesday.

Barrick filed a complaint in District Court the same day, seeking to reclaim its $1 million deposit on the casino.

Meanwhile, Poster Financial, which also owns the Golden Nugget Las Vegas but agreed in February to sell the property to Houston-based Landry's Restaurants for $295 million in cash and debt assumptions, filed a competing complaint Wednesday seeking to keep the $1 million deposit.

Landry's, which is entering the gaming business through its purchase of the 1,800-room downtown casino, will acquire the Laughlin casino as well without having to put up any additional money since the Barrick transaction fell through.

"We worked in good faith with Barrick and its advisers to enter into a purchase and sale agreement," Poster Financial Chairman Tim Poster said in a statement. "It is unfortunate that the transaction will not close, but more troubling is the assertion that Barrick's failure to close was caused by the performance of the Golden Nugget Laughlin or the actions of Poster Financial Group."

Barrick Gaming President Stephen Crystal had said that the purchase agreement was terminated because Poster Financial had breached certain provisions in the contract.

"Factually, this is without merit and it is disappointing to me, because it is disrespectful to those individuals who have operated the Golden Nugget Laughlin," Poster said.

Crystal declined comment Wednesday, saying the matter will be decided in the court.

Landry's expects to complete its purchase of the Golden Nugget casinos by year's end.