Harrah’s shooting for March opening of Binion’s Horseshoe

By Liz Benston (contact)

Wednesday, Jan. 28, 2004 | 11:09 a.m.

Harrah's Entertainment Inc. has begun the process of reviewing the assets of Binion's Horseshoe in downtown Las Vegas and hopes to re-open the property by early March, people familiar with the situation say.

Harrah's has not yet submitted an application to Nevada regulators to take over the historic casino, a first step toward re-opening the property, company spokesman Gary Thompson said.

The Las Vegas company was expected to start its due diligence on the property today but won't be able to review staffing issues until next week, when Harrah's anticipates receiving payroll information from Horseshoe seller Becky Behnen, Thompson said.

"We're gathering information so we'll be able to answer questions that the Gaming Commission and Gaming Control Board have" about the transaction, he said.

Thompson declined to comment on the specifics of the deal or when the property would re-open.

At a hearing in Clark County District Court Tuesday, Judge David Wall granted a landlord that owns about 60 percent of the Horseshoe real estate the right to seize that property -- but said the landlord could not take possession of the property until at least March 2.

The landlord is one of two that is suing the Horseshoe's operating company for back rent.

Judge Wall said he wanted to give the Horseshoe more time to consummate its sale to Harrah's, said Jeffrey Barr, an attorney for the landlord.

The ability to seize the property is of limited use while the Horseshoe remains closed -- but the landlord has few other options, Barr said.

"We had to protect our client's interests if this deal (with Harrah's) falls through," Barr said. "All we know is that Harrah's (deal) isn't going to close until (at least) March. That's a lot of time between now and then to back out of a deal."

The landlord has no assurance yet from the Horseshoe or Harrah's that it will be paid back rent or rent that continues to accumulate, Barr said.

The landlord on Jan. 20 received a court judgment of $747,000 for rent owed through January.

"The reality is we have to get paid sometime," Barr said. "The question is when that is going to occur. I'm sure all the other creditors are anxious as well."

The second landlord, which is still pursuing its lawsuit in Clark County District Court for back rent, executed on a judgment for about $440,949 in November by seizing cash from the casino.

Harrah's said last week it had struck a final purchase agreement with Behnen that would allow the gaming giant to acquire the rights to the Horseshoe brand in Nevada as well as the famed World Series of Poker tournament, which Harrah's expects to hold at the Horseshoe as usual this spring.

Terms of the deal weren't disclosed, though sources familiar with the agreement say it is an asset sale rather than a stock deal and is worth more than $50 million.

Horseshoe representatives have reported paying off gamblers owed winnings as well as workers' salaries, while Harrah's has pledged to pay off other Horseshoe debts that are still under review. Still unclear is how officials will handle advance hotel reservations, which have not yet been canceled.

A public hotline set up after the Horseshoe was shut down Jan. 9 has urged customers who are scheduled to stay at the hotel anytime within the next month to make other hotel arrangements.

Gaming Control Board Chairman Dennis Neilander said last week that regulators have talked with Harrah's officials about what would be required of the company for regulators to expedite their application.

Regulators have a process by which they can expedite a casino takeover within a day or so. The process would allow for Harrah's to re-open the property by taking over the Horseshoe's existing gaming license. But the deal must be structured in a certain way before that can happen, Neilander said.

"The board is prepared to expedite it consistent with what's in the application," he said.