$95M Vegas Casino Deal Fizzles

Marking yet another failed Las Vegas property trade in recent months, plans for 155 East Tropicana L.L.C. to sell its Hooters Casino Hotel to Hedwigs Las Vegas Top Tier L.L.C., an affiliate of the investment group led by NTH Advisory Group L.L.C., have disintegrated. The $95 million deal was declared null and void on June 6 due to the buyer’s failure to make a previously agreed upon payment. It was on April 30, 2007 that 155 East Tropicana entered into an asset purchase agreement for the sale of Hooters Casino to Hedwigs, which made an unsolicited offer for hotel. The property, located on the Strip near the intersection of Tropicana Ave. and Las Vegas Blvd., encompasses a 696-room hotel and 29,000 square feet of gaming space. As per the arrangement, Hedwigs was also committed to assuming responsibility for 155 East Tropicana’s $130 million in principal amount of 8.75 percent Senior Secured Notes due 2012. Now, Hedwigs’ pockets are $5.5 million lighter due to its failure to make the stipulated $500,000 payment due on or before June 6. The payment was required as a result of a third amendment to the deal; the total $5.5 million loss stems from non-refundable deposits and extension fees. The Hooters transaction is not the first Las Vegas property deal to fall apart in recent weeks. After having signed an option in 2006 to pay $450 million for a 27-acre site at the intersection of Las Vegas Blvd. and Sahara Ave. for a $4 billion mixed-use hotel-casino project, joint venture LVTI L.L.C. announced a week ago that it had backed out of the deal. Melbourne, Australia-based Crown Ltd., which owned a 37.5 percent stake in the partnership, plans to write off its $42 million investment in the project.