Siena Sells for $3.9M

The following was just posted on another thread by the mysterious yet renowned bloggers behind http://www.rereno.com/:

“I was there at the auction. Here are my quick thoughts:

Siena Hotel Spa Casino was sold at an auction at US Bankruptcy court for $3.9M. This figure is “free and clear”, and the court will determine the distribution of the proceeds at a later date. The court did authorize that the outstanding liens for property tax, sewer fees, gaming fees, and RSCVA be paid from the proceeds immediately to allow the transaction to close within 48 hours. This will leave about $3.5M to be split among the creditors. It looks like RE Reno LLC who own the $50M will get nothing in the end.

There were 3 bidders: Northern Nevada Asset Holdings (new owners of Silver Club in Sparks), Stratus West LLC (a division of Stratus Gaming?), and the winning bidder Grand Siena LLC. This entity is controlled by David Colvin from Las Vegas, who is also the principal behind Gaming Arts (www.gamingarts.com). There are reported to be 5 investors total. One, Jay Meilstrup of Reno, is president of http://www.gametech-inc.com/”

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5 thoughts on “Siena Sells for $3.9M

  1. A couple more observations:

    – Innovation Capital took home a $300,000 commission on the $3.9M sale. Terms were $200K plus 2% of the sales price with $300K being the minimum. This over and above their generous consulting fees, and both come out of the gross sale proceeds.

    – If I were a REL or RER investor and I’m not, I’d be questioning just what IC brought to the table and if this auction was too rushed. Yes, they show a good track record in this sort of transaction, but it isn’t like they did a national campaign or placed “casino for sale” ads in the RGJ. Combining the statements in court by the 2 IC reps, they contacted or were contacted by 46 parties about the sale. 35 nondisclosure agreements were sent out, and 16 were signed and returned. This resulted in the 3 bidders (there were no disqualified bidders).

    – The BK court was right to allow an accelerated sale in my opinion but maybe this was too accelerated. The Order approving the sale was just posted by the court yesterday afternoon, clarifying the terms of the sale as being free and clear and not subject to Barney’s parachute or the other Leases, liens, judgments and Executionary contracts. Not everyone has PACER as their home page, and the ambiguity of what the Order really meant killed the financing of one qualified bidder that I know of, and perhaps others.

    This is a bittersweet evening for me. When JR and I first hooked up through the magic of Google, we often discussed our common objectives in publicizing the Siena story, though also knew those objectives might sometimes be in conflict. For me, getting the Siena into the hands of someone, anyone, who could keep it open for the benefit of Reno and its workers and residents was primary and it looks like that has happened. JR was on board with all that, but of course maximizing the residual value of the REL and RER investments his primary objective. It’s unfair that I “won” and he as your proxy “lost” today. I wish the result could have been more mutually beneficial, but the cards were stacked against your cause.

    So I know you aren’t happy campers tonight, and this was but one battle in your war. But if I can leave you with at least a bemused grin, I will share with you one more detail I learned in court today – Andy “King” has amazingly girlish hands. Seriously.

  2. Thanks for the kudos, JR. The Order finalizing the Siena sale finally got entered today (17 November), and the deal should close by the end of the week. Barney didn’t get his $7M parachute, poor boy. I’ve got the Order posted on http://www.REreno.com along with some thoughts on the auction process. You guys got hosed!

  3. On 11/22/10 Barney assigned his permanent subterranean easement for construction, maintenance and use of an underground pedestrian tunnel to the Grand Siena. It was signed by David Colvin and recorded on 12/3/10. On the same date Barney assigned his permanent air space easement for construction,etc of an enclosed stairwell structure appurtenant to the Grand Siena. I wonder if he did this for free or if he collected some $$$ that should have gone to the RE Reno/Loans investors.

    When Gold Mountain Financial Institution (signed by Maribel Ng,vice president) assigned the deeds of trust to RE Reno in August of 2001, both easements were included in the legal description of the property. How did they become Barney’s individual property?

    See Washoe County recorder’s office records online for copies of the deeds.

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