Boulder Strip hotel-casino, RV park to be auctioned

David Strow

Tuesday, Nov. 23, 1999 | 10:38 a.m.

Sunrise Suites Hotel, together with a neighboring RV park, will go on the auction block in January to cover the debts of bankrupt Sunrise Suites Inc.

An auction date of Jan. 26 has been set for the property, located on 24 acres of land on the Boulder Strip. A recent appraisal put the value of the hotel-casino and RV park at $91.65 million.

The hotel, with 300 rooms, opened in 1991. The 224-space RV park opened in 1996.

The property is expected to generate significant attention because of its location and its one unused asset -- a new 73,500-square-foot casino that has never opened.

"The casino is not operating, and has never opened," said attorney Candace Carlyon, who is handling the liquidation of the Sunrise Suites property. "We're getting a lot of interest in this property from existing casino operators. It's an interesting location."

Sunrise Suites filed for Chapter 11 bankruptcy in March. Carlyon estimates the company has liabilities of $68 million.

First in line to receive payments from the proceeds of the property are First Republic Bank and General Bank, who list a combined $39.5 million in secured debt. During the auction, these creditors will be given a bidding credit up to the amount they're owed.

That would give General Bank an edge as the largest creditor, with $31.27 million in claimed debt. But if it were to assume the property, it would have to cover First Republic's $8.22 million in claims.

Also listed as a secured creditor is CS First Boston, which is claiming $5.5 million in connection with a failed loan agreement. CS First Boston already collected $2 million in connection with this agreement. Its claims are being challenged by other creditors in court.

Sunrise originally planned to open the casino, then valued at $35 million, on Dec. 27, 1998. But those plans were shot down after the Nevada Gaming Control Board voiced concerns about the background of owner Michael Mona Jr. during a December 1998 licensing hearing.

The board expressed the most concern about Mona's relationship with a group of telemarketers who ran afoul of the Federal Trade Commission in 1993. One of these telemarketers, Richard Secchiaroli, was later convicted and sentenced to 51 months in federal prison, and ordered to pay $21 million in restitution. The board also challenged Mona's accounting practices.

Mona denied any wrongdoing, but requested that the application be referred back to the board's staff, rather than risk an outright denial by the board. The application was never resubmitted, and the company declared bankruptcy three months later.

If the sale of the hotel-casino and the RV park aren't sufficient to cover the company's liabilities, Carlyon said she will proceed with the sale of an 18-acre parcel of vacant land at Las Vegas Boulevard and Warm Springs Road in March. If liabilities remained, she would then proceed with the liquidation of Mona's personal assets.

"We hope (the sale of company assets) will generate enough in proceeds," Carlyon said.