Wednesday, May 26, 1999 | 3:45 a.m.
CARSON CITY - Only one person showed up Wednesday to bid on the Ormsby House hotel-casino - and his $2 million offer was a fourth of what the current owner has invested in the local landmark.
Cerberus Partners, a New York investment fund, has until next Tuesday to accept or reject the bid from builder-investor Tom Day of Riverside, Calif.
Bob Cashell, the veteran Nevada casino operator who has been running the hotel-casino for Cerberus, questioned whether the offer would be accepted.
Cashell also said he may have to cut back staffing or employee hours at the club if the offer is rejected because it's not clear whether Cerberus will continue putting money into the operation pending some future sale. The Ormsby employees 290 people.
Cashell has been trying to rebuild the troubled resort and Cerberus has been planning to sell or auction the property ever since acquiring it in a January 1998 foreclosure sale.
Day, 52, who had to put down a $400,000 deposit at the conclusion of the brief auction, said he has never been involved in a casino before.
His ventures have included building projects, an electric company and a recreational vehicle park in Southern California.
Day would have to get a Nevada gambling license if his bid for the Ormsby House is accepted. But his bid wasn't subject to getting such a license.
Three unidentified bidders wanted to make offers subject to eventual licensing. But auctioneer Eric Nelson said those offers weren't considered as part of Wednesday's proceedings.
Cerberus took over the Ormsby House by default as the first mortgage holder of a $5.5 million loan issued in June 1996. Nobody bid at the foreclosure sale, leaving the property for Cerberus, which to date has invested more than $8 million.
The Ormsby was opened in 1972 by Paul Laxalt, a former Nevada governor and U.S. senator, and other members of his family. The Laxalts later sold to Woody Loftin, whose son Truett took it over after his father's death. The club then went through bankruptcy proceedings and closed down from January 1993 to February 1995. Reopened by Barry Silverton, the club faced more financial troubles and was dogged by state fines, layoffs and lawsuits for nonpayment of bills.
Silverton borrowed heavily from Cerberus, defaulted and finally filed for Chapter 11 bankruptcy protection in February 1997 with debts exceeding $11 million.
The Ormsby went through the bankruptcy process with no buyer emerging and the property was awarded in receivership to Cerberus in September 1997.
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