Dispute erupts over auction of Vegas hotel-casino

Grace Leong

Monday, Sept. 10, 2001 | 10:40 a.m.

A dispute has erupted over the auction of the bankrupt Vacation Village hotel-casino, which claims court-appointed auctioneer Eric Nelson Auctioneering has a conflict of interest.

The Las Vegas Strip's Vacation Village, in court papers filed Sep. 4, said Eric Nelson Auctioneering isn't qualified to auction the property because the auctioneer is a client of Gordon & Silver, the Las Vegas law firm that represents Vacation Village's largest creditor, Foothill Capital Corp.

Vacation Village also accused Eric Nelson, the auctioneer's broker, of being the hotel-casino's competitor because he is president of two Las Vegas gaming companies, Phoenix Leisure Corp., which owns a casino resort and a gaming vessel in Mississippi, and Viva Gaming & Resorts Inc., a gaming development company.

But Nelson denied Vacation Village's allegations.

"We don't have a conflict of interest because Gordon & Silver doesn't represent Eric Nelson in this case. We're hired by the Bankruptcy Court and (U.S. Bankruptcy) Judge Robert Jones, at the Sep. 4 hearing, believes we're qualified to hold the auction," he said.

U.S. Bankruptcy Judge Jones rejected Vacation Village's request on Sept. 4 to remove the auctioneer and scheduled a status check hearing on Sep. 11.

"As far as being a competitor is concerned, I am the president of Phoenix Leisure and Viva Gaming, and we do have some gaming interests outside Nevada but we've never owned any gaming property in Nevada. We're not licensed in Nevada," Nelson said.

Vacation Village also claimed Eric Nelson threatened to destroy Vacation Village's business and its owners when he was told by the hotel-casino that it was trying to get a court ruling to remove the auctioneer.

A hearing is scheduled Tuesday on these claims.

But Nelson denied those allegations. "My job is to make public knowledge that the property is on auction, and to sell the property to the highest bidder. Eric Nelson will not be the willing and able buyer. My interest is not in the property but in maximizing value to the creditors and the Heers family."

Nelson said several potential buyers have emerged.

"There are several hotel owners in Las Vegas, several Californian investors and three gaming companies outside of Nevada that are interested because of its unique location on the Las Vegas strip. There's also the potential to improve the number of rooms from 300 to 1,000."

Meanwhile, another hearing is scheduled Tuesday on whether several professionals who were retained by Vacation Village before its bankruptcy filing are to be paid.