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Hard Rock works out deal to avoid foreclosure
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LAS VEGAS REVIEW-JOURNAL
NorthStar Realty Finance Corp. and other lenders seeking to foreclose on the Hard Rock Hotel in Las Vegas have reached an agreement with the owners of the financially struggling hotel-casino, according to a Las Vegas-based attorney representing one of the lenders.
The agreement, which was reached over the weekend and announced on Monday, cancels a public foreclosure of the property that had been scheduled for today in New York, said Jeff Silver, an attorney with Gordon Silver, which is representing NorthStar.
Silver said the parties were able to work out a deal to avoid foreclosure that would ensure changes are made to the operations of the Hard Rock to make sure "the owner could service the debt on the property."
"If that means certain management changes ... those things will be worked out between the borrower and the lenders," he said. The Hard Rock Hotel is majority owned by a subsidiary of Credit Suisse AG, while Morgans Hotel Group in New York has a minority position and manages the property.
On Wednesday, $1.25 billion in debt was scheduled to mature. Jennifer Foley, a spokeswoman for Morgans Hotel Group in New York, declined to comment on the company's plans to restructure to extend the debt.
Foley also declined to comment on the deal to avoid foreclosure.
The agreement removes the need for a meeting before Nevada gaming officials in Carson City today to approve Navegante Group of Las Vegas to run the property should the lenders have succeeded in foreclosing on the property.
Silver said the deal was reached after gaming agencies, the Navegante Group, lenders and hotel officials "worked through the entire weekend to reach a settlement."
In a filing with the New York Supreme Court on Thursday, NorthStar argued the "best chance of recovering the largest portion possible of its $95 million loan balance" was to take control of the Hard Rock Hotel.
NorthStar loaned approximately $100 million toward the purchase of the hotel. Other lenders include Brookfield Financial LLC and Vegas HR Private Ltd.
NorthStar claimed that the owners of the Hard Rock missed a monthly payment of $460,000 that was due on Feb. 1, the filing said.
The Hard Rock Hotel was built in 1995 and completed a $750 million renovation and expansion less than a year ago. A joint venture that included Morgans Hotel Group and DLJ Merchant Banking Partners bought the hotel-casino in 2007.
The hotel-casino, with 1,500 rooms and 2,800 employees, recently settled a $650,000 complaint with the Nevada Gaming Commission that employees sold drugs and let patrons use private restrooms for sex and drugs.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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With mortgage rates at all-time lows, now may be a great time to refinance -- if you meet new stringent criteria. Search online for 123 Mortgage Refinance they got me the 3.21% rate even with my not so good credit history.
1.2billion in debt, most are shut down, but CEO's continue to run the debt up and make sure they get paid first, no wonder some committ suicide. Stop going to the Hard Rock.
Northstar is a Credit Suisse puppet. Northstar is a de facto affiliate of Credit Suisse. Northstar has been a primary presenter at Credit Suisse's annual global real estate conference from 2005-2008 (which I've verified). At the end of the day, Northstar takes it's marching orders from Credit Suisse on this. It's VERY MUCH a situation where the creditor is taking orders from the debtor. The real people hurt here are the beneficiaries behind the various debt pieces, their representation (the servicers) have abandoned their fiduciary responsibilities.
There have been MANY legitimate offers to buy the Hard Rock north of $600M in the last several years. As it has with so many other poorly underwritten mega-sized assets, Credit Suisse has ensured that the asset cannot be stripped from their control.
This is not a transparent matter, its a feint within a feint within a feint.
Let's not forget either that Hard Rock desperately wants to get their name taken off the building as well.
I'll put my masters degree in Finance up against your $10,000 investment in a pizza joint any day lvfacts101. Hard Rock couldn't even pay $460,000 for a month's interest. I doubt they can cover the $1.2 billion that comes due tomorrow. Try to grasp the situation lvfacts101, if you can.
The place is a toilet unworthy of branding as a Motel 6.
Love it when people with no investment in the business tell the owners how to run it! VegasDude2010, put up your own money to run a business if you're so smart. I have and I won some and lost some, but never listened to outsiders like you who had no idea what it takes to run a business. Just 'cause you ate a hamburger in a restaurant doesn't mean you can operate one successfully!
The Refi Plus program will waive the normal credit score requirement for a refinance; it will have reduced documentation standards for proof of income; and it will allow for computer-based appraisals, which tend to inflate the value of a home and make it easier to qualify for a refinance. Search online for 123 mortgage refinance they are the best and fast.
NorthStar blew their chance to take the Hard Rock at pennies on the dollar. Shame on them. Nothing will be different a year from now when they still can't make the debt payments, even on a restructured loan.
This must mean that NorthStar Realty Finance Corp must be getting a cut of the toke from the hooker and drug sales that take place every night (and day) on that property! Those girls swinging on the poles must move right up to the suites after their shifts! Never in my wildest (and I had been going to the HR Casino from its opening up until they shuttered the Joint) would I ever have imagined that they would have "working girls" swinging on poles over the gaming area! Really? Is that cool now? Maybe for 14 yr old boys; but I think that the whole stripper-pole thing jumped the shark a few years back. Funny; they don't have strippers on poles at the Cosmopolitan, do they?