Wednesday, Nov. 1, 2000 | 10:54 a.m.
A hearing on a request to appoint a receiver for the Vacation Village hotel-casino at 6711 Las Vegas Blvd. South -- sued last week for allegedly defaulting on a $19 million loan from a Wells Fargo bank subsidiary -- is scheduled for Nov. 14.
Foothill Capital Corp., a Los Angeles loan company, sued Vacation Village Inc., its affiliate, Shangri La Ltd. and five individuals it identified as general partners of Shangri La, alleging they failed to repay a one-year loan of $19 million at an interest rate of 14 percent when it came due on Sep. 14. The suit said $19.35 million was due as of Oct. 23.
Shangri La owns a commercial shopping center called Sundance Plaza. Foothill said the $19 million loan is secured by the hotel-casino and the shopping center.
The loan is also secured by the inventory and accounts receivables and proceeds from the products, services and rents of the hotel-casino and the shopping center, Foothill said. Vacation Village and Sundance Plaza generate more than $1.544 million in monthly revenues, Foothill said in an application filed Monday for appointment of receiver.
Meanwhile, the state Gaming Control Board said it is aware of Foothill's lawsuit and had been monitoring Vacation Village's gaming operations even before the suit was filed.
"Vacation Village has been on our radar screens for some time now," said Control Board Chairman Steve DuCharme. "Where it's located and the way it's operated, Vacation Village has been running on very tight margins for a number of years."
"We've verified their gaming bankroll to ensure that gaming patrons and players are going to be paid ... Beyond that, we don't ensure vendors and general creditors or payments of outstanding loans," he said. "Whenever we become aware of any (gaming company's) financial difficulties, we increase the frequency of our bankroll verifications."
"If Vacation Village's gaming bankroll fell to such a low level that they can't pay the winnings, they may be required stop gaming altogether," Ducharme said.
Foothill asked for Las Vegas businessman Ed Nigro to be appointed receiver for Vacation Village. It said the immediate appointment of a receiver is critical to prevent the "misuse, dissipation and diversion" of a substantial portion of its collateral, which comprises cash and receipts generated daily by the hotel-casino.
Vacation Village officials could not be reached for comment on Foothill's lawsuit.