Cubix buys Ormsby House

Thursday, Sept. 16, 1999 | 10:56 a.m.

Partners Al Fiegehen and Don Lehr paid an undisclosed sum for the 200-room hotel that has been through two bankruptcy proceedings in the 1990s.

Instability has reigned at the Ormsby House since former owner Woody Loftin died in 1986, even closing for two years between 1993 and 1995.

Fiegehen and Lehr pledged a stable course and job security. The Ormsby House employs about 290 people.

The partners entered into talks with Ormsby House owner Cerberus Partners following a June 6 auction that netted only one bid for $2 million, which was rejected.

Fiegehen and Lehr committed to buy the hotel-casino now, even though the most lucrative business season just ended. There were indications that a possible hotel closure could have come later in the year.

"That's one of the reasons, because of what could have happened to these employees if we didn't buy now," Lehr said. "This is our town. The town needs this hotel. It needs it to be run properly. Carson City has been good to us. We've enjoyed living here. We've prospered here."

This Ormsby House, built in 1972 by the Laxalt family, had troubled times for most of its existence except for the 10 years it was owned by Loftin.

Bob Cashell, a former Nevada lieutenant governor and the popular general manager at the Ormsby House since September 1997, will stay on. He holds the casino's gambling license. Fiegehen and Lehr plan to get a license, but the application process with the Nevada Gaming Commission could take up to nine months.

Cerberus obtained the Ormsby House in a foreclosure sale in January 1998, a year after previous owner Barry Silverton defaulted on a payment to Cerberus on a $5.5 million loan. The Ormsby House has been for sale since that default in January 1997.

The Ormsby House will be owned by Cubix Ormsby LLC, a wholly owned subsidiary of Cubix Corp. Fiegehen and Lehr founded Cubix Corp. in Orange, Calif., in 1975 and moved the firm to Carson City in 1979.

Cubix, which employs about 200, is a privately held company that manufactures computer equipment and software used by companies and government agencies to operate networks and host Internet services.