Harrah’s waiting for Behnen signature

Friday, Jan. 16, 2004 | 11:14 a.m.

Three days after Harrah's Entertainment Inc. said it had reached a preliminary agreement to buy the legendary Binion's Horseshoe in downtown Las Vegas, Horseshoe owner Becky Behnen has yet to sign a final deal to transfer ownership to the casino giant.

A final purchase agreement was presented to Behnen early Tuesday but remains unsigned, according to a source familiar with the deal who declined to be named.

"Right now the ball is in Becky's court," the source said.

Behnen declined comment today.

Harrah's has pledged to pay off the Horseshoe's debts and seek regulatory approval to reopen the casino once it has reached a definitive agreement. The company has declined to quantify those debts or what it would pay for the property, though once source close to the arrangement has pegged the total deal at more than $50 million. The debts amount to about $50 million, yielding a few million dollars for Behnen, the source said.

A final deal also will allow Harrah's to make good on a plan to stage the Horseshoe's famed World Series of Poker tournament at the hotel-casino by its usual time in spring, the source said. Harrah's has hired a public relations firm to promote the championship at its old haunt, the source said.

Harrah's spokesman Gary Thompson declined to comment on future plans, saying a definitive agreement hasn't yet been reached with Behnen.

Thursday afternoon, employees covered by Culinary Union Local 226 and Bartenders Union Local 165 received paychecks for service through Jan. 9, when the casino was forced to shut down after the respective unions' health and welfare funds seized up to $1 million from the casino and depleted its bankroll. The funds were owed more than $2 million from the Horseshoe stemming from an court judgment approved a few months ago.

Checks were distributed to casino floor employees over the course of two days earlier this week. Some gaming employees covered by the unions reported mistakes on their checks for hours worked but those issues are being resolved, said Jim Bonaventure, director of legal affairs for the Culinary Union.

The union held a meeting for union and non-union workers Wednesday to notify them about unemployment benefits, job offers and training opportunities.

Horseshoe workers are eligible for unemployment benefits of up to $317 or so per week, Bonaventure said. Workers may also receive job training and receive information on full- and part-time jobs at Nevada Partners' center on West Lake Mead Boulevard, he said. Nevada Partners, a nonprofit job training service, offers a Culinary Training Academy in partnership with the Culinary Union.

Thursday, Harrah's also set up a hotline for the general public at 407-6123 with information on the potential purchase of the Horseshoe.

Some gamblers who were owed money reported to the property Thursday afternoon with proof of their winnings.

State Gaming Control Board Chairman Dennis Neilander said he has received assurance from Behnen that gamblers will be repaid as required by Nevada law.

Gamblers began to be repaid Monday and there hasn't been any indication from the Horseshoe that any future wagers, such as sports bets, also wouldn't be repaid, said Keith Copher, the Gaming Control Board's chief of enforcement.

The Harrah's agreement calls for the company to take over and reopen the property as soon as it receives regulatory approval. Debts could take weeks or months thereafter to assess for repayment, according to a source familiar with the deal.

Regulators have a process by which they can approve certain casino takeovers in a matter of days. But Gaming Control Board officials haven't yet received any applications from Harrah's and therefore can't determine how soon the transaction could be approved.

Meanwhile, three lawsuits are still pending against the Horseshoe in Clark County District Court. One involves a claim that Horseshoe owes the Fremont Street Experience operating company about $3.8 million, including interest, for past due maintenance fees and assessments for the light show canopy and other related costs. Two separate suits involve claims of unpaid rent to landlords who own pieces of land underneath the property.

A hearing for the Fremont Street Experience suit is set for next week to decide whether the operating company is owed the money from the Horseshoe. If the operating company loses its motion in court, the judge will set a date for a jury trial.

One of the landlords in November received a court judgment that allowed for the seizure of up to $441,000 from the casino. The landlord seized money from the Horseshoe prior to the union funds' seizure Jan. 9. but is still owed rent. The second landlord received a separate judgment allowing for the seizure of property rather than cash but execution of that order has been stayed until Jan. 27. If the casino is still closed, the landlord will have the option of demanding financial records to determine what other assets the Horseshoe owns, the landlord's attorneys said.

Other landlords that own parts of the land under the property also are owed money but have not filed suit over their claims, the attorneys said.

Creditors still have the option of forcing the Horseshoe into bankruptcy by filing an involuntary bankruptcy petition -- a procedure that would not only put on hold the preliminary agreement from Harrah's but force the union funds to give back the money they had seized. Some legal experts think bankruptcy is unlikely because the Horseshoe is already buried under debt and losing money. But others say bankruptcy protection could have prevented the property from being shut down and that the Horseshoe could soon begin to generate a profit if run differently.