RE LOANS FILES FOR BANKRUPTCY PROTECTION

RE Loans filed for bankruptcy.  While this was inevitable, no doubt, it’s still a shock to the system.  Despite the fact that it’s our money, our lives and our futures, the real bankrupt entity is the Ng Family Dynasty.  They’re morally bankrupt.  They’re ethically bankrupt.  Yet they’re still out there doing business and tricking more suckers like us out of their hard-earned savings.

Maybe Led Zepplin said it best in “When the levee breaks”

If it keeps on rainin’, levee’s goin’ to break,
When The Levee Breaks I’ll have no place to stay.
Mean old levee taught me to weep and moan,
Got what it takes to make a mountain man leave his home

Equitatus posted the following a few minutes ago: Continue reading

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Siena Update

Thanks again to the inscrutable blogging superstar behind REReno for the attached document and the willingness to provide their thoughts: Continue reading

Barney’s “Hobby” Revisited

The Siena saga is nearly over, but info keeps landing in our laps.  Therefore, we present another document with the following reader comment:

3 Page Notice that all claims close 15 April, then 26 pages of creditors.  Wouldn’t you love to know how much American Document Destruction is owed, and exactly what their services were?  It takes some major cajones to stiff your shredding company.

Click here for the document:  Creditors Doc 265

Do you see any creditors on the list that spark your curiosity?

 

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… Continue reading

**BREAKING NEWS** SIENA HOTEL SHUTTERED

Inside sources report that the Siena will close at noon today. 

This page will be updated as the story unfolds.

Per a document filed by Hi-Five’s attorneys yesterday:


“…liquidity constraints have required that the Debtors shutdown their hotel operation until adequate operating capital can be obtained. The Debtors intend to complete their current negotiations no later than October 29, 2010, at which time they will either seek Court approval of a transaction that will provide for the reopening of the casino or reposition the Cases consistent with a longterm shut down of the business and the marketing and sale of the real estate asset. Consistent with this  repositioning, the Debtors hereby withdraw certain of the motions and applications currently set for hearing on October 21, 2010.

“On October 8, 2010, the Debtors were faced with a serious liquidity crisis precipitated by their inability to pay current invoices due to NV Energy with respect to their utility services. The Debtors considered a full shutdown of the Siena at that time. However, several investors remained interested in financing the property’s operations, even on a very compressed timeframe. Accordingly, in order to allow these negotiations to further develop, the Debtors took the interim step of closing the gaming floor at the Siena, thereby eliminating their
minimum bankroll requirement and freeing up cash to pay various operating expenses, including outstanding utility bills, Nevada gaming taxes, and certain insurance premiums.  This drastic step provided the company and Innovation with additional time to continue dialog with three interested investors. While one of those parties declined to go forward for reasons unrelated to the Siena, two others have remained in active negotiations with the Debtors and their advisors. However, due in part to the loss of revenue precipitated by the closing of the gaming floor, the Debtors have quite simply run out of time and money. As of October 20, 2010, they concluded that they are unable to continue to fund operations while these negotiations play out, and the Siena is currently in the process of being shutdown on at least an interim basis.”

We will keep you posted on all further developments.

Links Galore:

Reno Gazette Journal
Channel 4
Channel 2
KOLO TV
Las Vegas Sun
Siena’s own website
Letter To Siena Employees
REreno blog

PHOTOS:

Comments on the Siena’s Supplemental Statement re: BK

On September 22, 2010, Andy S. Kong of the law firm Arent Fox submitted a “Supplemental Statement in support of: (1) Motion for authority to obtain post-petition financing; (2) Motion for order authorizing debtors and debtors-in-possession to employ certain professionals in the ordinary course of business and to set procedures; and (3) Joint motion of One South Lake Street, LLC and Wild Game Ng, LLC for order authorizing the interim modification of the debtors’ hotel casino lease and land lease.”

We have already discussed the lease and the suggested modification (3), so let’s focus on items (1) and (2).


Item (1) is a  motion for authority to obtain post-petition financing.
The debtors (Hi-Five, One South and Wild Game Ng) seek financing in the amount of $179,980.50.  This financing would “enable Wild Game Ng to pay the premiums required for its general liability insurance.”  Is it incorrect to assume that Wild Game Ng has not been paying its required premiums?  Did the general liability insurance for the Siena lapse?

This “Premium Financing” arranged by IPFS Corporation of California “is an agreement for insurance premium financing.  Notwithstanding the inadvertent references to ‘working line of credit’ and ‘credit line’ in the Financing Motion, the Premium Financing Agreement does not provide a working capital line of credit for the Debtors.”   That may be the case, but it appears there’s more to this $180k loan than meets the eye.  (We are told this has been approved within the past day or two.)

Let’s pull another paragraph for review to underscore this sentiment:

“The Premium Financing Lender’s liens and security interests shall be senior to the rights of the estates in this or any subsequent proceeding under the Bankruptcy Code and to the rights of any other person or entity claiming a security interest in the Collateral, except, with respect to any loss payments which reduce the unearned premiums, the rights of mortgagees or other loss payees, including RE Reno to the extent it has a valid, perfected, and enforceable lien against the assets of One South and/or Wild Game.”

WOW.  By the way, the bolded, underlined text above was not added for emphasis.  It was emphasized as such in the filing.  What we think this paragraph says is that IPFS will get paid its $180k before RE Reno investors get their cash.  Furthermore, it’s the third time the document calls into question RE Reno’s “purported” status as a secured creditor “to the extent it has a valid, perfected, and enforceable lien against the assets of One South and/or Wild Game.”

Okay.  But what about document number 2594653 filed in Washoe County listing RE Reno as the secured party?  It’s the UCC Financing Statement for those interested in reviewing the document.  Furthermore, there’s the January 12, 2004 personal guarantee letter currently being ignored by Barney and Walter, but it doesn’t necessarily “perfect” RE Reno’s security interest.  The language from that letter reads as such:

01/12/04

Dear Investor:

Thank you for your investment in RE Reno, LLC.

RE Reno is the sole investor in the 50 million dollar

 

1st mortgage on the Siena Hotel, including the parking lots, 

hotel equipment, kitchen equipment and dining room

equipment.

To reinforce our position regarding  the 1st mortgage on the

hotel, we hereby personally guarantee the note secured by

the First Deed of Trust on the Siena Hotel.

Barney Ng

Walter Ng

Item (2) is a “motion for order authorizing debtors and debtors-in-possession to employ certain professionals in the ordinary course of business and to set procedures.”  Essentially, the Debtors need to pay a group of businesses a certain amount of money per month to perform services vital to the operation of the Siena.  So who are these “certain professionals”?

Let’s start with #4 and work our way up to #1.

Number 4 on the list is Onsite Consulting, who’s fees would be capped at $60,000 per month.  That’s $720,000 per year.  Onsite Consulting provides hospitality management and consulting for restaurants, casinos and hotels.  On its face, Onsite sounds like a perfect fit.  However, another glance would lead one to believe this is nothing more than putting lipstick on a pig (yes, the Siena is the pig).  Onsite may be able to smear some lipstick on the Siena, but it’s still the Siena.

Number 3 on the list is Elever Professional, clocking in at $10,000 per month.  Elever does executive recruiting, interim placement and performance consulting.  This makes no sense and unless we are missing something here, Judge Newsome should consider denying this request.

Number 2 on the list is KMC, Inc. at $8,000 per month.  There are two KMC’s on the internet – one does information management.  The other manufactures fluid film bearings.  Regardless, $8k is a boatload of cash to pay KMC.

This brings us to Numero Uno on the list and our favorite inclusion.  Number one, at $4,000 per month “is a California virtual law firm that offers a variety of legal services at cost-effective flat rates. Our virtual law offices and user-friendly website ensure efficiency in the services we render at reduced expense to our clients.

We are not a simple document preparation service, but California licensed attorneys dedicated to providing superior legal services at fair rates.”
The Siena, as far as we know, is located in the state of Nevada.  This virtual law firm is located in California.  Prior to founding the firm, one of the firm’s partners “served as General Counsel to one of the largest private commercial lenders in California, where he engaged in real estate and corporate transactions, advised on employment and regulatory matters, and coordinated litigation and bankruptcy matters throughout the country.”
His name?
Matthew Kelly.
How amazingly self-serving is it of Barney’s Hi-Five & Wild Game Ng to include his daughter and son-in-law’s firm, the Kelly Law Group, LLP on the Ordinary Course Professionals list?
All-in for these four groups?  $984,000 per year.

Our last two points have to do with this document is in regard to  Part IV, The Lease Motion.

First, it appears Konami Gaming has objected to the Lease Motion.  According to Kong, the Arent Fox attorney proposed to represent Barney’s companies in this BK and restructuring process, “The Debtors are still evaluating the objection but submit that Konami Gaming, Inc.’s objections may be addressed, at least in part, by the Stipulation.”  Looks like Konami isn’t putting up with Barney’s BS.  We’ll continue monitoring Konami’s involvement.

Secondly, Kong writes, “The Debtors do not believe the above clarifications are controversial.”

When people who trusted Barney have lost everything, everything is controversial.