Maxim faces fine for financial move

Friday, March 14, 1997 | 11:59 a.m.

CARSON CITY -- The Maxim hotel-casino in Las Vegas has tentatively agreed to pay a $50,000 fine for violating state gaming regulations by shipping $1 million from the financially troubled resort to buy California farmland.

Although unsigned, the proposed stipulation between the Maxim and the state Gaming Control Board is scheduled to be presented for approval at the March 20 meeting of the state Gaming Commission.

It's been more than one year since the complaint was filed against Baby Grand Corp., owner of the Maxim. John B. Anderson, a Sacramento Valley, Calif., rancher owns Baby Grand, which is in bankruptcy court.

If approved, the Maxim would have 30 days to pay the penalty. The stipulation also requires Anderson to reimburse Baby Grand $20,000 as his share of the fine by July.

The Maxim says it believes the conditions placed on its license about disbursing money were ambiguous, but it wants to settle the case without going through litigation. And it says it's willing to give up its right to contest the complaint in a hearing before the Gaming Commission.

When the Maxim ran into financial troubles in 1990, a condition on the state license was not to pay more than $200,000 a year to Anderson, who was president and chairman of the board. In 1992, one of Anderson's corporations sold 1,690 acres of farmland in Solano County, Calif. Then through a series of transactions, Anderson got the land back, using $1 million from the Las Vegas resort.

One condition on the state license was that the money generated by the Maxim was to be used only for its operation and that of a sister casino the Station House in Tonopah. The board said the $1 million exceeded the $200,000 restriction.

The company is in bankruptcy court in Las Vegas. And a plan is expected to be presented to the court this month for the sale of the holdings of Anderson in Nevada and California to satisfy debts.

Bud Hicks, Reno attorney for the Federal Deposit Insurance Corp., said his client is owed $70 million. One of the major creditors of the Maxim was Eurekabank, which has since gone out of business. The FDIC replaced the Maxim as the creditor.

Hicks said there were other creditors in the picture. A special liquidation master has been appointed to set a timetable and to decide the order in which Anderson's assets will be sold. He said each property, in Nevada and California, will be sold separately.