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August 27, 2014

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Filing shows Binion’s owner delinquent on rental payments

Beyond the Sun

MTR Gaming Group Inc. has disclosed that it faces up to $1.1 million in rental costs for Binion's hotel-casino in Las Vegas because Binion's new owner is delinquent on rental payments to two landlords.

The new owner, TLC Casino Enterprises, purchased Binion's from Chester, W.Va.-based MTR in March 2008. This year, citing the recession, TLC has been pressuring landlords at Binion's and the Four Queens hotel-casino to accept rental concessions.

Several landlords have responded with lawsuits against TLC and those are now pending in Clark County District Court.

MTR last month said in a regulatory filing that in connection with its original acquisition of the downtown Binion’s Gambling Hall & Hotel from Harrah's Entertainment Inc., it provided limited guarantees, which reduce each month as rental payments are made on certain land leases.

Some of those expired in March 2008 and March 2009 and two remain in effect totaling about $1.1 million and expiring in March 2010.

In another filing Monday, MTR said that on July 8 it received a notification from one of the landlords that TLC had failed to pay $26,000 in rent that was due July 1; and on July 13, MTR received the landlord's demand that it make the payment pursuant to its guarantee.

"We paid the amount demanded, thus curing the event of default. However, we have been advised that TLC has also failed to pay the $125,000 rental payment which was due on Aug. 3," MTR said.

MTR sued TLC last week in Clark County District Court for indemnification of the rent MTR paid to the Binion's landlord.

TLC has not yet responded to that lawsuit and has declined comment on the issues at Binion's and the Four Queens.

MTR also disclosed Monday that on July 14 it received a notification from a second landlord that TLC had failed to pay $3,900 in rent that was also due July 1.

In its lawsuit, MTR said TLC is in breach of its agreement to buy Binion's.

The lawsuit said that according to the sales agreement, as long as MTR is a guarantor of rent for leased properties, TLC is required to promptly pay all rent and not take any action that will result in claims against MTR.

"Defendant did not live up to its end of the bargain," the lawsuit charges.

Arlington Realty Co. Limited Partnership is the landlord that is supposed to receive rent of $125,000 per month while Isola Trust, managed by Jigsaw Properties LLC, is due $6,720 per month, the lawsuit said.

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