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October 30, 2014

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Wayne Newton’s lawyer says loan could squeeze entertainer out of deal

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Sam Morris

This is an aerial view of Wayne Newton’s Casa de Shenandoah estate Monday, May 21, 2012.

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Wayne Newton and his wife Kathleen McCrone speak to reporters after a Judge ruled in their favor that Steve Kennedy, developer and manager of CSD LLC, stay 50 feet from the Newton's and their home. Thursday May 31, 2012. Kennedy had plans to turn the Newton's mansion into a museum.

A proposed $1 million loan to help pay for the upkeep of Wayne Newton’s herd of 51 Arabian horses at the Casa de Shenandoah can continue to go through — but without a Clark County District Court judge’s endorsement.

That was one of several rulings Tuesday by Judge Elizabeth Gonzalez as she listened for more than an hour to attorneys in the dispute between the Las Vegas entertainer and his partners over a stalled tourist attraction proposed at Newton’s former 39.5-acre estate at 6629 S. Pecos Road.

The Newtons were paid $19.5 million for the property but retained partial ownership as partners in a firm set up to develop and manage the project.

The project is to include a museum celebrating Newton’s life and other attractions on the property. The Newtons are to move out of the mansion when a residence is built for them on the property, but that hasn’t happened yet.

The lawsuit, filed in May by Newton’s developer partners, allege the project was supposed to have opened in February 2011 but was derailed because Newton and his family have interfered with and frustrated development plans.

“They took the $19.5 million and then basically hunkered down in the mansion” and would not give up any personal property to put into the planned museum on the property, Doreen Hartwell, a CSD attorney, said during Tuesday’s hearing.

Legal documents show CSD and Newton have battled over such matters as where hay should be stored on the property, where CSD employees can park, the type of security gates used and whether CSD would use Newton’s horses in shows planned at the attraction.

The $1 million loan in contention Tuesday was instigated by CSD as a result of the judge’s ruling in June that the horses stay on the property and continue to be cared for by CSD.

At Tuesday’s hearing, CSD attorney Charles McCrea Jr. told the judge that CSD has already put $30 million into the project and has no operating budget for the horses.

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Horses graze on property owned by entertainer Wayne Newton in Las Vegas Thursday, Feb. 25, 2010.

McCrea told the judge it cost about $10,000 per week to feed and care for the horses, and the $1 million loan is needed to comply with the judge’s June order.

Newton and his wife, Kathleen McCrone Newton, who are minority partners in CSD, opposed the loan, saying there was no emergency. They say CSD has the funds to continue operations without the loan.

Also, Stephen Peek, the Newtons’ attorney, urged the judge not to endorse it, saying the terms of the loan were set so that it must be repaid within 30 days.

If it is not, the lender, a Texas limited liability company connected to the other CSD partners, can foreclose on the loan and take the property away, Peek said.

Peek said CSD was pushing for the judge to endorse the loan so they could “squeeze out the Newtons and move and do what they have always wanted to do, which is to take the property away from the Newtons, denying them their 20 percent interest in the property and the income that would come from that.”

Peek said if there were any efforts to foreclose on the property because the loan wasn’t paid, the Newtons would be back in court to fight it.

In deciding not to endorse the loan, Gonzalez said she had not had time to fully investigate it.

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