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Green Valley Ranch Resort in Henderson, Nevada Saddled with $750 million
 of Debt May Soon be in Default, in Danger of Being Foreclosed

By Howard Stutz, Las Vegas Review-JournalMcClatchy-Tribune Regional News

February 27, 2010 --Green Valley Ranch Resort is saddled with some $750 million of debt and may have to declare bankruptcy, Station Casinos said late Friday in its response to a highly-charged motion filed eight days ago by its joint venture partner in the Henderson casino.

In the short filing, Station Casinos said GCR Gaming, an affiliate of the Greenspun Corp., used information provided by the "disgruntled former general manager" of the casino, who was fired after "several documented and recorded instances of inappropriate conduct."

In a Feb. 18 motion, GCR Gaming said GV Ranch Station, an affiliate of Station Casinos, breached its fiduciary responsibilities in managing Green Valley Ranch Resort, including steering high-end players away from the casino to resorts wholly owned by Station Casinos.

The filing was the latest move in what has quickly turned into an ugly feud between two of Las Vegas' most prominent families, the Greenspuns, who own and operate media, land development and gaming companies; and the Fertittas, founders of the Station Casinos brand.

The six-page preliminary response filed with the U.S. Bankruptcy Court in Reno was done to briefly answer GCR Gaming's "scattershot collection of allegations and legal theories" that will be addressed in greater detail in subsequent filings.

The strongest language was directed toward former Green Valley Ranch general manger Timothy Wright, who was fired from the resort in November. In the filing, Station Casinos said Wright's e-mails were reviewed, revealing "deeply troubling personal and professional misconduct during his tenure" at the resort.

In its Feb. 18 motion, GCR said information about Station Casinos wrongdoing came from a Feb. 1 affidavit by Wright.

According to Station Casinos, after Wright was fired, he reportedly "attempted to extort (the company) by threatening to go public with the false allegation that Station Casinos encouraged the movement of high-end table games players from Green Valley Ranch to Red Rock Resort."

Station Casinos said Wright demanded an additional six months' severance pay of $162,500.

"(Station Casinos) declined to 'pay off' Mr. Wright," according to the filing.

Station Casinos filed for Chapter 11 bankruptcy in July to reorganize its nearly $6 billion in debts. That bankruptcy did not include the Green Valley Ranch Resort joint venture.

GV Ranch Station filed for Chapter 11 bankruptcy protection this month.

GCR Gaming claimed the GV Ranch bankruptcy filing was done in "bad faith" after Greenspun Corp. Chairman and CEO Brian Greenspun had two meetings with Station Casinos Chairman and CEO Frank Fertitta III to discuss accusations that the casino operator was undercutting Green Valley Ranch.

However, Station Casinos attorneys said the Greenspuns are trying to avoid having their equity interests in the casino "wiped out."

The resort, which opened December 2001, may soon be in default to its secured lenders and is in danger of being foreclosed upon.

"A restructuring of Green Valley Ranch is both necessary and imminent," the filing said.

Station Casinos and the Greenspuns are reportedly in negotiations with lenders concerning a restructuring.

However, lenders are questioning a 2006 transaction in which Green Valley Ranch paid approximately $285 million each to the Greenspuns and Station Casinos.

The Greenspuns are "trying to ignore the economic realities surrounding Green Valley Ranch." If their ownership is wiped out, the "result may have serious negative tax consequences" for the Greenspuns.

Greenspun did not respond to a request for comment by press time.

On Thursday, Station Casinos and key creditors holding nearly 67 percent of the company's secured debt announced an agreement in principle on a comprehensive reorganization plan.

Details of the proposal were not made available. The company said the Fertitta family and "certain other current creditors and investors" would make a "significant reinvestment" in the reorganized company.

Along with the Green Valley Ranch joint-venture, the Fertittas and the Greenspuns jointly own and operate Aliante Station, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes and Casinos.

The Fertitta family owns nearly 24 percent of Station Casinos, which wholly owns several other local gaming properties, including Sunset Station and Red Rock Resort.

A hearing on the entire motion will be held April 19 in Reno.

Contact reporter Howard Stutz at or 702-477-3871.


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