Maxim hotel-casino to close Dec. 6

Gary Thompson

Thursday, Oct. 7, 1999 | 2:56 a.m.

The 800-room Maxim hotel-casino will be closed Dec. 6, throwing 791 employees out of work just in time for the holidays, employees were told Thursday.

The announcement was made by veteran casino executive Ed Nigro, who was appointed receiver of the off-Strip property before it emerged from bankruptcy earlier this year.

Nigro signed a five-year contract with Dallas-based Premier Interval Resorts Inc. to continue operating the property, but said he was forced to take the closure action after Premier breached an agreement to provide operating funds for the Maxim.

Premier Interval principals Gary and Michael Kornman couldn't be reached for comment, while another company executive, Don Saunders, referred all questions to the firm's general counsel, Tom Russell, who was also unavailable.

A clearly distraught Nigro issued federally required 60-day closure notices to the resort's employees Thursday after an early morning meeting with officials from six unions representing the workers.

"I don't know what they're going to do," Nigro said of the workers facing a bleak holiday season. "Some of them have been here since the property opened in 1977. Everyone pitched in to keep the Maxim opened over the past two years.

"What infuriates me, in addition to what's happening to the employees, is that Premier had agreed to assume leases, labor contracts and other obligations when they bought the Maxim last May.

"It now appears they're content to let it go back into bankruptcy and walk away from those obligations."

Premier bought the Maxim for about $36.5 million from West Coast Mortgage Ltd., which had assumed control after previous owner John Anderson defaulted on loans. That price excludes another $5.5 million of obligations Premier assumed when it took over as landlord for the hotel-casino.

Nigro agreed to continue running the property for Premier, which initially said it planned to build time-share units at the East Flamingo Road site. But when Premier breached its agreement to fund cash-flow shortfalls during the slow summer period, Nigro sent several letters to the company warning of the consequences.

Premier didn't responds to the warnings, forcing him to notify the landlord he was terminating the contract and closing the hotel, Nigro said.

The gaming executive, who also runs a real estate development company, is using his monthly management fee to pay some of the Maxim's suppliers so the property can stay open until Dec. 6.