Walter gets sentenced to 5 years of probation.
Kelly sentenced to 18 months in prison.
Walter gets sentenced to 5 years of probation.
Kelly sentenced to 18 months in prison.
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
Is there something more to the expeditious sale of the Siena than meets the eye?
Read this: Zive To Retire
Then ask yourself which firm represents the new owners of the (Grand) Siena.
Walter’s letter to RE Reno investors, dated November 11, 2010, states that the sale of the Siena “has not closed as of November 15, 2010.” That’s just the beginning of the absurdity contained within Walter’s letter, found HERE.
Walter states that “it appears likely that the aggregate distribution to R.E. Reno from the sale proceeds will be in the range of $2 million to $2.5 million.” Is Walter so senile as to actually believe that RER will command over half of the sale price when companies like IGT, Konami Gaming and the various city and state agencies are all vying for the proceeds? This is just another case of half-truths and nonsensical blue sky B.S.
Rage faded to disappointment overnight, but returned with a vengeance this morning. The realization (or was it a reminder?) that the valuations provided by the NG family aren’t simply inflated, but greatly exaggerated, hit like a ton of bricks. Weissenborn and his high-priced team have been noticeably quiet. They apparently don’t have time to update us on anything, let alone the great financial loss we sustained yesterday. Arent Fox made money. Stephanie & Matthew Kelly made a few bucks. So did Innovation Capital, to the tune of $300,000 plus consulting fees of $10,000 per month. We, however, lost everything unless, of course, you believe in divine intervention.
“So tomorrow is the auction. I’m a bit of an insider and have been following the activity closely. There was only one party who conducted a thorough due diligence inspection of the Siena as far as I can tell (I read vanity plates and the contractor signs on the F-150s in the parking lot). I think the opening bid will be $1. And I have no indication that there is a back up bidder. I don’t think that RE Reno or Loans has the deep pockets anymore to enter the fray. Meaning you investors will be wiped out 100%.”
We know Konami Gaming filed another objection yesterday. We read what REreno wrote above.
WHAT DOES THIS MEAN?
Per the RGJ’s Ray Hagar this morning:
The auction of the Siena Hotel Casino in downtown Reno will take place next week in a Reno courtroom, where a national investment banking firm will try to sell the downtown resort that recently closed after a long string of financial problems.
“The reality is that the Siena has ceased operations and we are going to sell this in a bulk sale in one transaction to a singular buyer,” said Matt Sodl, managing director of Innovation Capital LLC in Los Angeles. “It will be a turn-key operation for that buyer and that buyer can either run it as it were, with the hotel and casino, or the buyer can decided if they want to operate a casino there or not.”
Those interested in participating the Nov. 10 auction are asked by Monday noon to submit a $250,000 deposit by wire transfer, evidence of financial wherewithal, a signed non-collusion affidavit and a mark-up of the Debtors’ form purchase agreement.
One-on-one tours of the property will be held on Tuesday with the auction Wednesday in the U.S. Bankruptcy Court of Judge Gregg Zive.
“We have marketed this thing far and wide and have a lot of interest in this asset,” Sodl said. “We have had a lot of interest from in-market competitors to buyers who are looking to get involved in the Reno market.”
It appears as if the Siena will be put on the auction block. No “binding, acceptable offer[s]” were made to buy the property.
Here is the closing paragraph from the Arent Fox filing:
WHEREFORE, based on the foregoing, the Debtors respectfully request that the Court enter an order: (a) establishing auction procedures with respect to the sale of the Debtors’ real and personal property; (b) approving and authorizing the sale by auction of the Debtors’ real property free and clear of liens, claims, interests, and encumbrances, subject to higher and better offers, (c) approving the assumption and assignment of certain unexpired leases and executory contracts to the winning bidder and establishing the cure amounts, if any, payable under such Assumed Agreements, or, in the alternative, approving the rejection of the Debtors’ unexpired leases and executory contracts to the extent such agreements are not assumed and assigned to the winning bidder, (d) approving that certain addendum to Innovation’s engagement letter dated October 28, 2010; (e) waiving the 14 day stay provided in Rule 6004(h); and (f) granting such other and further relief the Court deems just and proper.
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.
The latest filing from Barney’s attorneys lists the following:
DATE: October 21, 2010
TIME: 11:00 a.m.
PLACE: 300 Booth Street, Courtroom 3
Reno, NV 89509
The judge is the Honorable Gregg W. Zive . Zive is also handling the Station Casinos BK.
The venue change is good news. It takes the filing out of Barney’s backyard and moves it to Reno, the location of the Siena. If you happen to be in Reno on the 21st, please drop on by 300 Booth Street, Courtroom 3. It should be rather interesting.
Here’s the meat of the filing, which was filed in response to the objections raised by Konami Gaming:
Konami, who had not previously raised concerns with respect to the Lease Motion and therefore was not a party to the Stipulation, filed an objection to the Lease Motion. The Debtors submit that Konami’s objections and concerns have been addressed in full by the Stipulation except for Konami’s unfounded request that it be insulated from potential disgorgement of post-petition payments it receives from the Debtors in the event that Wild Game ultimately lacks the funds necessary to pay One South on account of the administrative claim granted to it under the Stipulation.
The Debtors submit that the issue of disgorgement is premature since the Stipulation merely
alleviates Wild Game from having to make full Contract Rent (as that term is defined in the
Stipulation) payments for a limited period of time , thereby allowing Wild Game to pay trade creditors and contract parties such as Konami, and the Stipulation otherwise reserves the
rights of parties-in-interest and establishes a framework for the intercompany claims between
Wild Game and One South to be resolved at a later date.
WHEREFORE, based on the foregoing, the Debtors respectfully ask that this Court grant the Lease Motion with the modifications as reflected in the Stipulation.
Our conclusion? Let’s see how Zive rules on this issue, as well as the $4,000/month payments to Matthew Kelly. The half a million a month payments from Wild Game Ng to One South Lake would be sliced to a “mere” $11,000, but one thing is clear – Barney still wants to be paid by Barney.
Please feel free to share your thoughts and opinions in the comments section below.
The August 2, 2010 Siena Newsletter from Mr. Callicott speaks of such good things to come. Do you remember all the way back in August when the Siena was on top of the world? Yeah, neither do we. Clyde teases us with this statement: “We a few (sic) new surprises this time just to shake things up a bit.” Who knew that meant they would stop allowing gambling at the casino?
Perhaps the Nevada AG should investigate this sentence: “Everyone is a guaranteed winner.” We’re not winners on this deal. Are you?
Callicott ends by saying, “See you on the floor,” but fails to alert us to the fact that the table games will be gone, the slots will be unplugged and the gambling floor will be walled off two short months later. Details, details….
Another Reno Summer is whizzing by at the Siena and the action is getting even hotter. We a few new surprises this time just to shake things up a bit. Let’s start with tournaments. Not only do we have $2K Open Slot Tournaments, now on it’s new day Tuesdays from 12vnoon to 8PM where you could win your share of $2000.00 in cash and prizes, we’ve added a new tournament, The Siena $1000 Free Video Poker Tournament, Saturdays from 12noon to 3PM . For River Club card member we are rolling out the Red Carpet as we host special “Guest Appreciation Days”.
On Monday’s all River card Members will receive 2X points for their Slot, Video Poker and Keno play as well as 2 for 1 lunch specials and 50% off all drink prices from 6PM to 9PM.
On Thursday join us for the all new Ladies Night – All Day !! All female River Card members will receive 2X points and 50% off drinks from 6PM to 9PM and that’s not all, all Female River Card members will also be eligible for a special drawing where they can win their share of $500.00 in cash and Spa packages.
It’s the return of 2 of our more popular promotions, Friday’s in August it’s the Great Point Stacker, where the top 20 point earners for the day win $50.00 in Free Play and on Saturdays The CASH IS KING is back. You could win your share of $1000.00 in cash simply by spinning the Siena Spin to Win Wheel.
Everyone is a guaranteed winner. Drawings every 30 minutes from 4 to 9 PM Spin the wheel of cash for your shot at $1,000 in cold hard cash. And don’t forget that you can now EARN 3X’s MORE FREE PLAY AND MORE VALUABLE COMPS than ever before simply by using your River Club Card.
It’s all about the experience, the guest service, the great food, and fun and exciting entertainment. The staff and management of the Siena have made a major commitment to you. So I ask you again – Don’t you think it’s time to rediscover the Siena?
See you on the floor,
Clyde Callicott, General Manager
One South Lake Street, Reno, NV 775-32-SIENA
Our favorite Reno-centric blog, REreno — Hardcore Real Estate News — does a great job of providing local (and insider) analysis and information, especially concerning the Siena. This witty repartee can be found RIGHT HERE (yes, please click HERE).
They ask some great questions. Does anyone have any of the answers?
Hoping these questions will, at the very least, spur ongoing dialogue.
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.”
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.
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.