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good wishing observer wrote on August 05, 2008 10:27 PM: It's very sad to read comments from people who seem to be getting pleasure from the fnancial troubles of this resort. Unfortunatly Lake Las Vegas isn't the only company going through tough times during these tough times. Whatever it is that brought on this situation doesn't really matter going forward. I certainly don't want any business in the U.S. and especially Nevada to fail and obviously the judge thinks the same way. Their fall effects us all whether directly or not. Lake Las Vegas employs hundred of people and is home many families who through their hard work, education or luck can afford the type of lifestyle Lake Las Vegas offers. Best wishes Lake LV may your vision continue and may you come out ahead for the sake of this City and Country.

Edward L. wrote on August 05, 2008 04:55 PM: Wow, Cynical, you know your stuff. I used to write contracts for Bechtel, but we never got too deep into the bankruptcy stuff because we would settle with the the sorry contractor for 50 cents on the dollar. So it's obvious that the little guy is getting trampled by the big guy in LLV. Those mechanics liens, like the 8 million owed to LV paving may not get a dime. I guess the judge was swayed by the fact that LLV barely had enough money to pay their newly arrived immigrants their minimum wages mowing golf courses.. I thought she sounded smarter than that, but I'm sure, here in Sin City, someone got to her. Very sad and sneaky....

Cynical Observer wrote on August 05, 2008 01:09 PM: Buried in bankruptcy filings are charts showing approximately 30 investors in the $675+ million mortgage loan by Credit Suisse Cayman Islands Branch. The RJ printed some of those names.

The same charts show the "new $127 Million loan" being made by Credit Suisse and 2 other investors.

Nasty bankruptcy trick hidden in the new $127 Million loan:

Prior to the bankruptcy, the $675M loan was first mortgage. Then $5+ Million in mechanics liens were like a second mortgage. Credit Suisse spent $49 Million in 2007 and 2008, before the bankruptcy, keeping Lake Las Vegas afloat. That $49M was third lien. In bankruptcy as Lake Las Vegas sold properties, the $675M would be paid off first, and then all mechanics liens would be paid. Credit Suisse's $49M couldn't be repaid from sales before payoff of all mechanics liens.

However, the $127 Million loan approved yesterday dramatically alters the payoff picture. $49 Million of that loan will be immediately paid to Credit Suisse to reimburse its pre-bankruptcy expenses. As Lake Las Vegas properties are finally sold off, the new $127M loan gets paid first, the $675M mortgage gets paid second, and the mechanics lien claimants get paid off third.

Essentially, as consideration for advancing $78 Million in new cash, Credit Suisse gets to shove the mechanics lien claimants into third lien position, making it unlikely they will be paid anything given bankruptcy overhead, accruing interest and declining property values.

Apparently the unsecured trade creditors, in fourth lien position throughout, decided they had no hope of repayment if Credit Suisse foreclosed the $675M now. Their only hope of repayment is if the properties sell for more money next year, so they supported the $127M new loan.

Usually mechanics lien claimants appeal (unsuccessfully) in these circumstances.

Edward L. wrote on August 05, 2008 11:48 AM: Cynical, thank you for filling in the puzzle. Now it starts to make sense. Am I correct that Credit Suisse knuckled the original investment banks to fund even more money to LLV, because if they didn't they would probably lose everything they originally put in? This is exactly what Donald Trump did in the late-80's, when his AC casinos were going under, and the banks realized they were better off putting up with his BS than getting ownership of a losing business. But they did put Trump on a 20 Grand a month allowance. Poor boy, barely pays for his hair.

Cynical Observer wrote on August 05, 2008 08:39 AM: I want to point out a glaring unreported truth.

The current mortgage lender for Lake Las Vegas' undeveloped lands, golf courses, hotel and lake is Credit Suisse Cayman Islands Branch. Their mortgage is excess of $675 Million.

When that $675+ million mortgage went into default in 2007, instead of foreclosing on the real estate, Credit Suisse extracted from the owners of the Lake Las Vegas borrower entities, Bass and Boedekker, an "Assignment Agreement" now found at Bankruptcy Court Docket Document #155 Exhibit 5. The Assignment Agreement clearly states that effective January 2, 2008 all ownership of the Lake Las Vegas borrower entities was transferred to Credit Suisse Cayman Islands Branch.

To reiterate, as of January 2, 2008 Credit Suisse Cayman Islands Branch was both the owner of the Lake Las Vegas properties and mortgage lender on the Lake Las Vegas properties.

On January 2, 2008, after Credit Suisse's ownership of the Lake Las Vegas entities became effective, Credit Suisse transferred all of those ownership interests to a series of straw man entities controlled by Frederick Chin. That same Frederick Chin is quoted in the RJ's article today, as the person in charge of the bankruptcy debtor.

During the last four months of 2007, leading up to the transfer of Lake Las Vegas to Credit Suisse, Frederick Chin was Credit Suisse's hand picked Chief Restructuring Officer, monitoring the operation of the Lake Las Vegas entities by their former owners.

Both before and after the bankruptcy, the straw man entities owning and operating Lake Las Vegas had no other assets or income and were entirely dependent on Credit Suisse for cash flow.

Ten months from now nothing will change. Credit Suisse will still be hiding its defacto ownership of Lake Las Vegas.

Edward L. wrote on August 05, 2008 08:17 AM: The drive to LLV is what is killing them. You turn from beautiful? Boulder Highway on to Lake Mead Blvd, and are accompanied for five miles or so with trailer parks and RV storage places. Wonder how many of them go to LLV daily? They've stopped most promotions at the empty casino, and still charge too much for their food and beverages. They sure can't make it with only LLV residents-they go to the Strip. Free rent for a year at the empty village-that's not working out either. It's so bad that the Henderson Speed cops only show up during special events, like New Years eve. Funny thing is that the cops usually ticket the poor employees of the place, since the residents take limos and cabs to the Strip. LLV and the casino have changed management several times, one hotel is bankrupt, and on and on. Sorry Denise, LLV need more than better management-It needs a miracle.

Jack wrote on August 05, 2008 07:50 AM: Lets face the facts here. This abominition was never supposed to be in the first place. These people came along, paid some dumb*ss elected officials to allow them to steal a bunch of water out of our lake for their own private millionaire community. Then they build the dump so far from civilization that I don't know anyone who works there more than a few months because of the gas it takes to travel out there every day. Then they charge an outrageous amount for these places. Lets see, what do you think was bound to happen. I went out there looking when they opened(I had to pack a lunch and snacks for the ride)mostly overpriced little condos and junk!
PS try to refi your own house when your short cash and see the baks line up!

Denise M wrote on August 05, 2008 07:41 AM: Lake Las Vegas has had lousy management from day 1. A sound plan and professional marketing will make this lovely resort as successful as any other high end community in our valley. Hey, all of you nay sayers, lighten up. Not everything in life is negative. Come on out to the resort and enjoy yourselves in a beautiful spot.

Tom Best wrote on August 05, 2008 07:33 AM: Gee, I saw a bargain house in LLV on Realtytrac.com. Nice view of the golf course and the Lake. In foreclosure, a steal at only 28 million. BTW, that loan at 15% interest sure is no bargain. LLV will probably be going to Dollar Loan Center next?

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