Judge won’t stop Continental closure

John Wilen

Wednesday, March 31, 1999 | 11:26 a.m.

The Continental hotel-casino in Las Vegas could close tonight at midnight. Landlord American Realty Trust Inc. is threatening to take possession of the property from former owners Hotel Continental Inc. and Crowne Gaming Corp.

The property is at the busy intersection of Paradise and Flamingo roads.

American Realty loaned $31.2 million to Hotel Continental Inc. in 1992. Hotel Continental was subsequently sold to Crowne Gaming. Both Hotel Continental Inc. and Crowne declared bankruptcy soon after that sale. American Realty Trust foreclosed on the Continental a year ago.

But American Realty leased the Continental back to Hotel Continental Inc. to allow the property to continue generating revenue while American Realty looked for a new operator. Over the past year, American Realty and Hotel Continental have tried to negotiate a long-term lease several times. When negotiations broke down last fall, American Realty filed a motion to evict Hotel Continental Inc.

That motion was granted, and Hotel Continental Inc. was to be out of the premises by Jan. 31. In a January bankruptcy court hearing, Hotel Continental got an extension of that eviction order until midnight tonight.

But in bankruptcy court today, Hotel Continental was not so lucky. Arguing that the jobs of 350 employees are at stake, an attorney for Hotel Continental Inc. implored U.S. Bankruptcy Court Judge Robert C. Jones to keep the Continental open for two more months.

"The Hotel Continental has 350 employees who, at midnight tonight, will be unemployed," said Hotel Continental attorney Blaine Bates.

Extending the company's eviction until May 31 would give American Realty two more months to find an operator for the Continental, and would give the property's employees a definitive date by which they must find another job, argued Bates.

But Lenard Schwartzer, attorney for American Realty, said there is no legal basis for Hotel Continental Inc. to remain in possession of the Continental. Noting that the company is renting the property for only $90,000 a month, far below fair market value of $200,000 a month, Schwartzer said American Realty has simply decided it will be easier to sell the Continental if it is shut down.

"We do not want to continue this operation," said Schwartzer. "This is a business decision that the owner is allowed to make."

After seeking assurances from the U.S. Trustee's office that there is enough cash at the Continental to pay outstanding chips and tokens, and to pay final employee wages and accrued vacation time, Jones let his previous order stand.

"I don't think there's any legal basis for me to continue this," said Jones. "We just have to let it stand."

Bates could appeal the order, but said "I don't anticipate that happening."

The Continental has 400 hotel rooms, 500 slot machines and nine table games.