Vegas-Area Resort Developer Files for Bankruptcy

A sluggish economy coupled with housing market woes nationwide trickled down to the robust Las Vegas housing market, contributing to the filing to reorganize under Chapter 11 bankruptcy for Lake at Las Vegas Joint Venture L.L.C., the master developer of the Lake Las Vegas Resort. In conjunction with the Chapter 11 filing, the company has received commitments for up to $127 million in debtor-in-possession (DIP) financing from a group of lenders led by Credit Suisse as agent for post-petition financing commitments to fund ongoing operations and assessments related to certain pre-petition infrastructure obligations, according to company information. The company said that the DIP facility assures that there will be no interruption in day-to-day operations. The new financing would be used in part to fund ongoing operations and assessments related to certain pre-petition obligations, including repairs to the Las Vegas Wash bypass conduit underlying the 320-acre man-made lake at the center of the approximately 3,600 acre master-planned community. Additionally, pending court approval, the company said it would work to satisfy certain of its financial and infrastructure-related obligations. According to LLV information, the goal of the bankruptcy is to continue working on the project (pictured). LLV Holdco L.L.C., a subsidiary of Las Vegas-based Atalon Group, assumed ownership and management control of the master-planned community in early January after the former ownership group defaulted on approximately $540 million in loans in 2007. While the overall Vegas economy continues to break even or shine–as with the July 17 CPN coverage of the new $1.2 billion expansion project at the McCarran International Airport–LLV cited poor liquidity, substantial debt service, extremely challenging real estate market conditions and other legal and financial issues as the reasons for the bankruptcy. With the challenges facing today’s marketplace, it’s the heated concern about the economy that is contributing to the slowdown, according to a Grubb & Ellis Co. office market report for 2Q08. Lake Las Vegas Resort is a 3,592-acre master-planned residential and resort community adjacent to Lake Mead National Recreational Area and 20 miles east of the center of Las Vegas. It includes a 320-acre man-made lake, three signature golf course, two luxury hotels, a casino and retail shops and more than 1,600 completed residential units.Blog Comments