{"id":77310,"date":"2018-05-09T15:00:56","date_gmt":"2018-05-09T22:00:56","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=77310"},"modified":"2018-05-09T16:50:11","modified_gmt":"2018-05-09T23:50:11","slug":"las-vegas-lucky-dragon-casino-hoping-for-bankruptcy-sale-but-main-creditor-has-other-ideas","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/las-vegas-lucky-dragon-casino-hoping-for-bankruptcy-sale-but-main-creditor-has-other-ideas\/","title":{"rendered":"Las Vegas Lucky Dragon Casino Hoping for Bankruptcy Sale, But Main Creditor Has Other Ideas"},"content":{"rendered":"

Andrew Fonfa, owner of the Lucky Dragon Hotel & Casino, is hoping to sell the doomed venture via bankruptcy auction.<\/p>\n

\"Lucky
Lucky Dragon\u2019s owner Andrew Fonfa says he has had a lot of interest from potential buyers but lender Snow Covered Capital claims differently. It also values the property as left than half of Fonfa\u2019s valuation. (Image: Lucky Dragon)<\/figcaption><\/figure>\n

According to the Las Vegas Review-Journal<\/em>, bid procedures are scheduled to be considered at a court hearing on May 14, but there\u2019s a big dispute about the valuation.<\/p>\n

Fonfa believes his property is worth $143 million, but his main creditor, Snow Covered Capital, claims its worth less than half that, just $60 million.<\/p>\n

When LVRJ<\/em> asked Fonfa the reason for the discrepancy in a telephone interview this week, the developer said that it didn\u2019t take a genius to work it out. The implication is Snow wants the $50 million it’s owed in full and as quickly as possible.<\/p>\n

Lucky Dragon Should Be \u2018Abandoned\u2019 <\/strong><\/h2>\n

In a filing to the bankruptcy court dated April 30, Snow\u2019s attorneys claimed that the developers had been hawking the property for a year and but been unable to find a buyer. They suggested Fonfa should \u201cconsider abandoning the property\u201d instead of risking incurring further costs on a \u201cfailed sale process.\u201d<\/p>\n

Fonfa told the LVRJ<\/em> that this was not the case and that he had received lots of interest from prospective buyers.<\/p>\n

\n

Abandonment can occur when bankrupt assets are encumbered by loans, or when they don\u2019t have enough resale value to pay off creditors and are therefore not worth liquidating.<\/strong><\/p>\n

If Lucky Dragon were to be declared abandoned, Snow, as the lender, would ask the casino developers to reaffirm the debt with a new contract. If the developers refuse, the Snow could repossess the property or begin foreclosure action.<\/p>\n<\/div>\n

This would be the best scenario for Snow, but Fonfa has other creditors to pay. There is also the matter of the 179 investors, who each put $550,000 into the Lucky Dragon through the federal EB-5 visa program. This offers the possibility of permanent green cards for foreigners who invest big in ventures that create jobs.<\/p>\n

Foreign Investors in the Lurch<\/strong><\/h2>\n

Attorney Ryan Works, representing the foreign investors, said he would rather see a reorganization of the business that might bring in a new investor and new money as opposed to a sale, which could wipe out his clients\u2019 equity in the business.<\/p>\n

Despite collectively spending more than anyone else in the project, the foreign investors\u2019 money is in serious danger of going up in smoke and none have received US residency.<\/p>\n

Fonfa himself has called for a \u201cthoughtful auction\u201d that would ensure \u201cSnow Covered\u2019s secured claims are protected, but unsecured creditors are also given an opportunity to recover for their claims, and EB-5 investors are given an opportunity to preserve their investments, to the extent each are possible.\u201d<\/p>\n

Lucky Dragon was the first new casino to be built in Las Vegas since the recession. Opening in 2016, it hoped to capture the Asian locals and high-rollers markets but was beset by problems from the get-go<\/a>. It filed for Chapter 11 bankruptcy in February.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Andrew Fonfa, owner of the Lucky Dragon Hotel & Casino, is hoping to sell the doomed venture via bankruptcy auction. According to the Las Vegas Review-Journal, bid procedures are scheduled to be considered at a court hearing on May 14, but there\u2019s a big dispute about the valuation. Fonfa believes his property is worth $143 […]<\/p>\n","protected":false},"author":36,"featured_media":77312,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,18],"tags":[],"acf":[],"yoast_head":"\nLas Vegas\u2019 Lucky Dragon Casino Hoping for Bankruptcy Sale<\/title>\n<meta name=\"description\" content=\"Lucky Dragon Casino developer Andrew Fonfa has appealed to the bankruptcy courts for a sale auction, but lender Snow Covered Capital has values the property at less than half of Fonfa\u2019s price. 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