Hotel-casino auction delayed yet again

Monday, May 22, 2000 | 11:20 a.m.

The foreclosure auction of the Maxim hotel-casino in Las Vegas, scheduled to be held this morning, was postponed yet again after an emergency hearing Friday evening in federal court.

Following a 5 p.m. hearing, a lawsuit against Maxim owner Premier Interval Resorts and Maxim mortgage holder Meralex was sent back to state court. Plans to hold an auction May 15 were delayed when the case was sent to federal court at the request of AE Marketing, a company controlled by Premier controlling shareholder Gary Kornman.

A temporary restraining order blocking the sale was issued by the federal court. This order will expire Tuesday at 1 p.m. Meralex attorney John Curtas said he plans to press for hearings in state court to resolve the issue on either Wednesday or Thursday.

"I want to move forward (with the sale) this week," Curtas said.

The lawsuit, which has repeatedly postponed the sale over the last month, alleges that Kornman and Meralex intentionally drove the Maxim into insolvency and plan to secretly divide up profits from a foreclosure sale. The lawsuit was filed by three former shareholders in Premier.

Premier defaulted on its $42 million mortgage note, held by Meralex, late last year. Meralex attorneys claim the company is incurring losses of $20,000 a day keeping the property open while waiting for a foreclosure auction.