Judge to rule on Debbie Reynolds sale

A U.S. Bankruptcy Court judge this morning heard arguments on whether to accept a $9.2 million World Wrestling Federation offer to buy the Debbie Reynolds hotel-casino -- and on whether to entertain higher bids.

A joint venture headed by the World Wrestling Federation made the offer for the resort at a public auction Wednesday. But the offer, which includes $9 million for real estate and $200,000 for personal property inside the resort, fell short of liens on the property by about $2.5 million.

In court Wednesday afternoon, creditors split over whether the sale should be allowed. Lawyers representing holders of second and fourth mortgages against the resort argued against the sale, arguing it would not fully repay their claims.

Opponents also included David Siegel, a Florida time-share developer who once wanted to buy the property. Siegel holds a $300,000 claim against the Debbie Reynolds representing money he invested in the property to keep it running earlier this year.

Siegel told reporters this morning he was preparing to bid $10.3 million for the property, while WWF offered to increase its bid to $10.26 million. Judge Robert Clive Jones hadn't decided by press time this morning whether to allow the new offers.

Arguing for the sale to WWF at $9.2 million Wednesday were lawyers for the WWF, holders of the first and third mortgages on the resort, and some creditors owed for equipment.

Mike Oakes, an attorney for Telerent Leasing Corp., argued that though his client is owed $70,000 for 150 televisions and key card entry systems, he would be glad to take the $38,000 bid for the equipment.

"We're not delighted," Oakes said. "But from our standpoint, we'll take the $38,000 if we can get it."

A Debbie Reynolds operating company attorney said he did not think the judge could approve the sale.

"We did not receive enough to clear the liens on the property," said Reynolds attorney Lenard Schwartzer. "It was not a successful auction."

Besides allowing higher offers, Jones could deny the sale completely, sending the resort to a liquidation sale in 120 days. Or he could allow the real estate sale while denying the sale of personal property in the resort.

At Wednesday's auction, the personal property -- which includes everything from curtains and bedspreads to sound equipment for the resort's showroom -- fetched $256,000. Critics of the sale argued the personal property was not marketed correctly, and could be sold for more money. Personal property creditor claims total $450,000.

If the sale of the real estate is allowed, indications are the WWF will not keep the Debbie Reynolds name.

"This is going to be the World Wrestling Federation hotel," said Ed Kaufman, senior vice president and general counsel of the WWF.

Less clear was what the WWF's plans are for the hotel, and whether Debbie Reynolds would continue to be involved.

"We expect to use every square inch of the property," said George Simon, a principle in 905 Park View Group LLC, the joint venture's minority partner.

But he declined to give any specifics.

"If you're familiar with the WWF, you know that it'll be the best," said Simon.

Based in Stamford, Conn., the WWF is a professional wrestling organization. 905 Park View Group is a Cleveland-based investment firm.

As for Reynolds' involvement, "unfortunately, we have not been able to address that," said Simon.

Also undecided is whether the resort will be closed for renovations, said Simon.

The $9.2 million price included the hotel and casino buildings, the 6.13-acre site on which they sit, and the majority of the personal property, which was auctioned separately from the real estate.

The Debbie Reynolds includes a 193-room hotel, and a 6,600 square-foot casino. The property has struggled financially since opening in 1993. Several purchase offers have fallen through, and a lack of casino revenue forced the property into bankruptcy last year.

Reynolds and her son, resort chief executive Todd Fisher, were disappointed with the auction.

"We're glad to have it behind us," Fisher said. "We're not thrilled about the values."

"For me it's a shame, because I wanted a tribute to the motion picture industry," said Reynolds. "But they have the property now. They made the highest bid and it's theirs."

archive