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LVH RESORT SOLD AT FORECLOSURE AUCTION IN BUSINESS THE ECONOMY By Steve Green senior staff writer T he 2,973-room LVH resort was sold during a foreclosure auction Oct. 31. As expected, it was pur- chased by a joint venture between Gramercy Capital Corp. and Gold- man Sachs Mortgage Co. LLC. Goldman Sachs' affiliates were both investors in and lenders to the old Las Vegas Hilton, now called the LVH or Las Vegas Hotel & Casino. The property was foreclosed on after defaulting on its mortgage, which had a balance of $309.6 mil- lion as of Oct. 10. The amount of the Gramercy/ Goldman bid for the property wasn't immediately disclosed, but it was likely a credit bid in which the mort- gage amount due far exceeds the initially was for $250 million, but the amount owed grew with missed payments and interest. No operational changes are antici- pated in the short term, and the new owners have appointed experienced The receiver action was requested by Goldman Sachs after the owner at the time, Colony Resorts LVH Acquisitions LLC, defaulted on its value of the property. The mortgage mortgage after enduring steep loss- es during the recession. Colony Resorts LVH was owned by a Goldman Sachs affiliate and Colony Capital LLC of Los Angeles, headed by investor Thomas Bar- rack. During court proceedings last contract operator the Navegante Group of Las Vegas to run the prop- erty. on all "The future is bright for the LVH fronts," said Rick Stevens, chief operating officer of the Nave- gante Group, which said the sale ended uncertainties about the prop- erty. Oct. 31's sale capped a tumultuous 12 months for the Paradise Road property, which went into foreclo- sure proceedings last fall, early in the year lost its Hilton franchise and then was placed under control of a court-appointed receiver. year, Barrack made it clear Colony Capital wasn't going to pump addi- tional funds into the money-losing operation. During recent talks with gaming regulators, Goldman Sachs officials said they had no immediate plans for changes at the property and would take some time to assess its operations. LVH officials have said "substantially all" of the LVH's 2,200 employees would be rehired by the new owner. "We want agencies and our RECEIVER HAS NO POWER TO FIRE GIBSON, JUDGE SAYS RIGHTHAVEN, FROM PAGE 7 Steven Gibson in a move that was aimed at having Righthaven's appeals dismissed at the 9th U.S. Circuit Court of Appeals. Pros- ecution of the appeals was only subjecting Righthaven to further liability, the receiver argued. to express our appre- ciation to the Las Vegas community, state and local officials, vendors, governmental employees for their cooperation en- abling this transition to occur seam- lessly," Stevens said. The LVH also noted in its statement that since entering the foreclosure process in September 2011, "the ho- tel-casino has continued to conduct business as usual and has success- fully booked group and convention business for 2013 and beyond." Gibson, however, maintains the receiver- ship order only allowed the receiver to seize and auction the company's assets. Pro, dur- ing a hearing Oct. 31, agreed and declined a request by Hoehn's attorneys that the receiv- ership order be clarified or expanded so that the receiver could fire Gibson, settle with Hoehn and potentially dismiss Righthaven's two active appeals at the 9th Circuit. Pro's ruling creates what attorneys call an unusual legal situation in which Gibson is the CEO of a company with no assets and no mission except to pursue the appeal, which Gibson appears to be funding out of his own pocket. On the other side, the receiver and other creditors can try to collect and auction what- ever Righthaven assets they can find. Power up or wind down at Tivoli Village. Our selection of restaurants and lounges offer the perfect spots for lunch, dinner or happy hour. With seven choices in one stop there's always a place to turn business into pleasure. 8 | 12 NOVEMBER 2012 |