RE Reno Seven Months Later…

On May 14, 2009 Barney Ng wrote the following to RE Reno investors:

I recognize and appreciate the trust that you as an investor have placed in me in originally providing this Loan to the Siena, and because of this I am committed to the pay-off of the loan.

Barney’s commitment to paying off the loan should be lauded.  His follow-through, however, is laughable (so is yours, Walter – you, too, signed the personal guarantee).  Barney continues…

In addition, the Hotel was sold faulty and untested slot machines by International Gaming Technology (“IGT”), a major slot machine manufacturer. The introduction of these games into the casino floor has similarly negatively impacted the Casino’s operations. We have been litigating against IGT for over four years. The matter finally proceeded to trial in August of 2007. During trial a witness for IGT testified that the Siena was damaged in the sum of $160,000,000 dollars. However, before the case was allowed to go to the jury for deliberation, the judge inexplicably dismissed the jury and summarily decided the case in favor of IGT. Upon motion for retrial, the judge admitted that he abused his discretion in deciding the case against us and granted our motion for a new trial. However, IGT has appealed this order and we are now proceeding to the Nevada Supreme Court to argue the appeal.

As a result of the persistent problems associated with the faulty equipment, the Siena has been materially disadvantaged since its opening and has never been able to operate as a fully functioning Casino. The net effect of this is that the Siena has never been able to generate the projected profits necessary to debt-service the loan made to it by R.E. Reno, LLC. This is why I have been personally making the interest payments on the One South Lake Street Loan.  We are confident in our case against IGT and should there be a successful outcome, whether by winning at trial or through settlement, it is my intent to use the funds obtained from one of these outcomes to pay down or payoff the One South Lake Street Loan.

This is all well and fine, but then we received THIS DOCUMENT today.

It’s all over RE Reno folks.  There really is no money coming.  Ever.

5 thoughts on “RE Reno Seven Months Later…

  1. I seem to recall that REreno (the blog, no relation to the fund) called this one several months ago and was called a heretic, a grave stomper, an Ng plant and worse. For what it’s worth, there is certain level of thought in Reno that the Siena’s new owners overpaid for the property at $3.9M.

    So if RE Reno’s net return was $.00 on the gem in the tiara of the fund, what does it say about the prospects of the rest of the RE Loans portfolio? It was already valued at $.12 on the dollar even before the Siena fiasco.

    Bar-K, RE Loans, Walter, Kelly, Barney and all their entities are going to go BK sooner or later. FORCE IT NOW while there still might be some assets that do not have negative valuations when legal costs are considered.

    How do you take a $675M fund and grind it down to zero (if you don’t act)? Little retarded Timmy down the street could have made better real estate decisions by throwing darts, so the RE Loan’s MO was definately skew everything to maximize fees and transacton costs. Why can’t you investors catch these thieves? Are their legal unerpinnings that immaculate that they avoid challenge, or are you just out of funds and sinew to fight them?

  2. I think one problem with attempting any action is that most of the affected investors have no means for communicating with each other to compare notes or share ideas and strategies. This blog is a helpful start, but at best, people can only comment on a particular post, and whoever finds it next week or next month may not see those comments. There is no way to build a critical mass, or angry mob, as the case may be.

    Maybe it’s time to start a discussion group, where people can start their own threads with things that concern them, and comments from others would be easier for everyone to find. Would the moderators of this blog be willing to start a Google group, or similar, and link it to this blog so resources can be pooled?

    • Yes. Please share ideas on the best message boards and we will figure out a way to integrate. So far when we’ve given people the opportunity to discuss topics of interest to them nobody has taken advantage of the opportunity.

  3. John Robie, have you read the complaint filed in Contra Costa County by Dixon Collins? Do you have access to the document? I’ve caught wind of a few details. It may be an interesting topic.

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