Binion’s to appeal Fremont ruling

Grace Leong

Tuesday, Jan. 29, 2002 | 11:08 a.m.

Binion's Horseshoe hotel-casino, which was ordered by a state judge Monday to provide $1.9 million of its assets by Feb. 11 as security for membership fees allegedly owed to the Fremont Street Experience LLC, said it plans to appeal the decision to the Nevada Supreme Court.

Clark County District Judge Gene Porter granted Fremont Street's request to have a writ of attachment -- a document that allows the Clark County sheriff to seize funds to secure an unsecured claim -- imposed on $1.9 million in funds at Binion's casino cage.

But he gave the downtown Las Vegas casino 14 days to appeal.

Porter also required a $1.9 million bond to be posted by Fremont Street.

Porter denied Binion's request last week for a $34 million bond to cover what it said was a potential loss of more than $8 million a month in revenues and a likely loss of more than 1,700 jobs if the writ of attachment was granted.

Porter, who said he's "a little disappointed" at both parties' failure to settle the membership fee dispute, said it's "interesting that between (a hearing on) Jan. 2 and today, Binion's has developed new arguments that the assessment is illegal."

Robert Draper, Binion's attorney, criticized Fremont Street's efforts to attach the casino's cage as an attempt to cause Nevada gaming regulators to shut down the casino since the state requires an available cage of $1.2 million.

Fremont Street, which said it has been trying unsuccessfully for more than a year to recover past assessments since 1998 as well as current monthly dues from Binion's, sued Binion's in August after funding shortfalls forced the cancellation of a number of public events.

Hotels along the Fremont Street Experience pay assessments to pay off loans taken to build the pedestrian mall, video-display screens and supporting structures, as well as to pay for events, security, maintenance and administration.

Fremont Street, which said the viability of the mall could be placed in jeopardy if its members including Binion's were allowed to walk away from their contractual obligations, said "such a failure could affect the downtown business core as a whole as it could have a domino effect on other businesses, jobs and tax receipts for the City."

Patrick Reilly, Fremont Street's attorney, who accused Binion's of "raising wild allegations of violations of federal antitrust law by the Fremont Street" during the two settlement conferences instead of searching for solutions, said Binion's wasn't willing to enter reasonable settlement even after Fremont Street proved it wasn't engaging in the alleged antitrust violations.

Binion's accusations that Fremont Street violated federal antitrust laws stem from alleged efforts by Fremont Street to block access to the Horseshoe Club from the mall during its annual New Year's Eve party for the last three years in an effort to "punish Binion's and to benefit competing business interests of other members of the Fremont Street."

The casino alleged Fremont Street, at last year's New Year's Eve party, caused fire trucks and other emergency vehicles to be placed in a manner that blocks customers from entering Binion's parking lot.

Binion's President Becky Behnen, in a Jan. 25 affidavit, accused Fremont Street of launching a publicity campaign to give a false impression that Binion's -- whose net worth is appraised at more than $68 million -- is in danger of becoming insolvent.

"The attempt to attach Binion's cage when it has other readily available assets -- the attachment of which would not harm the Horseshoe's business -- reflects a continuation of this effort," she said in the affidavit.

Draper also questioned the validity of the assessments, saying the Pedestrian Mall Act authorized the city of Las Vegas only to contract with a private operating entity such as Fremont Street for the maintenance of the pedestrian mall.

The city didn't give Fremont Street the authority to impose assessments for the mall's maintenance and Fremont Street is usurping the city's right to impose assessments, he said.

He said the Experience disregarded Nevada laws that require a unanimous vote of all members for capital contributions of more than $5 million to cover any operating revenue deficit and a unanimous vote for any assessment to fund "expansion or capital improvements."

Behnen, who said the assessment was invalid because Horseshoe didn't approve any of the Fremont Street's operating budgets from 1999 through 2001, described the $1.538 million in assessments that Binion's paid since July 1998 as "inappropriate and unfair."

"The law requires these assessments, which are based on the number of rooms, square footage and traffic generated, to be equitable and fair. But the Horseshoe, which has 366 rooms, is assessed the same amount as the Golden Nugget, which has over 1,900 rooms," said Michael Stuhff, another Binion attorney.

Draper said the casino offered during settlement talks to pay $25,000 a month to settle overdue assessments, but also wanted the city to be involved in determining the amount of the assessments. Meanwhile, Gardner Jolley, an attorney for the Coulthard and Silvageni trusts that represent some of Binion's landlords, expressed concerns over whether the writ of attachment would affect their ability to receive rents.

But Binion's disputed Jolley's concerns, saying it has always been current on its rent payments.