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Greek Isles lender wants to sell, says owner has no equity left
Steve Marcus / file photo
The 202-room Greek Isles hotel-casino on Convention Center Drive near Las Vegas Boulevard.
Friday, June 26, 2009 | 10:20 a.m.
Greek Isles Casino
Sun Archives
The main lender to the Greek Isles hotel in Las Vegas has asked a bankruptcy court for permission to sell the property at auction, saying it continues to lose money and has dramatically declined in value.
The lender, Canpartners Realty Holding Co. IV LLC, plans to press its case to immediately auction the Greek Isles during a hearing July 16.
Greek Isles, with 202 hotel rooms and a small gaming operation, was forced into bankruptcy by other creditors April 6. A receiver appointed at the request of Canpartners has been running the property on Convention Center Drive between Las Vegas Boulevard and Paradise Road.
In a court filing in U.S. Bankruptcy Court in Delaware, Canpartners said Greek Isles owner GIH-SPE II LLC no longer has any equity in the property -- so there's no reason to encumber it in bankruptcy court.
Canpartners says appraisals show the value of the property has declined from $120 million in late 2007 to $44 million this month. But GIH-SPE II hasn't made interest payments since Dec. 17 to Canpartners on a $56 million loan issued in 2007 and it now owes $67.3 million, Canpartners said.
Canpartners said that besides GIH's negative equity of more than $20 million, the property has been losing more than $86,000 per month -- indicating there's little likelihood GIH can become current on its mortgage payments.
"Given the current economic conditions and the conditions of the gaming and hotel industries in Las Vegas in particular, revenue will likely continue to decline for the foreseeable future and net operating losses are projected to continue for at least the remainder of 2009," Canpartners said.
The lender added that the rapid decline in the value of the property "illustrates the extent of the losses experienced by the Las Vegas real estate industry and reinforces the unlikelihood of the debtor's successful reorganization."
Canpartners said a quick foreclosure sale will benefit it by eliminating expenses it faces in the bankruptcy case.
Canpartners also criticized the creditors that forced Greek Isles into bankruptcy. That happened the day before Canpartners planned to auction the property as part of the foreclosure process, thus delaying the auction.
Canpartners suggests the bankruptcy filing was made in bad faith.
And since the bankruptcy filing, those creditors have failed to justify their financial claims against GIH, Canpartners said this week in a motion against them to force them to adequately spell out their claims.
"Given the timing of the filing and the questionable standing of the petitioning creditors, (Canpartners) submits that the involuntary petition was filed in bad faith and the petitioning creditors have abused the judicial process solely to stall the foreclosure sale," Canpartners charged.
GIH and the other creditors in the case have not yet responded to Canpartners' motion that it be allowed to auction the property.
With its strategic location near the Las Vegas Strip and the Las Vegas Convention Center, the Greek Isles and its associated real estate are seen as having long-term value after the recession ends.
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Locally owned and independent for more than 50 years.
every 2 or 3 days we get a story like this now.
these places are so leveraged with debt and made so much money off of people's "paper value" that just a little drop in tourist volume is causing them to all go belly up.
it will be really interesting to see how the strip looks 5 years from now.
Formerly known as The Paddlewheel, Debbie Reynolds and owned but never opened by the WWF (wrestlers, not animal lovers).
Certain plots of dirt in Vegas are cursed. *cough* El Rancho *cough*
A few more unemployed. I sure hope the state has some reserves. Maybe they should not have approved so much spending after all.
good place to open a newly legalised brothel, would attract loads of tourists who will spend spend spend....
Why would anyone want to build a casino there? Too far up the strip, too far off the strip. Not even worth the $44MM they say it is now valued at. It should be a strip mall or maybe an auto glass shop.
Build a monorail stop at the Greek!
Somebody will steal it for far less than $44 million. They will make a killing when the recession ends.
i want to put a white castle hamburger place there.
The problem with the place is.....
It is a cheesedick property...
They also need to change out that musty old skanky smelling porno theatre carpet and remodel the place...
Good god, budget suites is way better than that old Debbie Reynolds Hotel hands down !
By stevem
6/25/09 at 1:51 p.m.
Suggest removal haha, ok.
i proved this is a demand issue, not a lending issue.
i'm right. the facts show i'm right.
you seem kinda dumb. you must be a mormon.
Another bit of Vegas history going out, sad! Went there two years ago & saw The Rat Pack Show it was the perfect setting...I felt like I was back in the 60's with Sinatra & Friends. Since The Rat Pack isn't there any more, it's just another old run down piece of Vegas. Glad I got to see it when I did. Too bad the "Big Money" like MGM Grand or Wynn didn't buy these old treasures and upgrade them instead of building those towers that they now can't afford. Could have saved money and some great Las Vehas history
laughing at how sad logic_should_rule's life must be for him to reference a posting i made on a totally different article as a way to "get me".
haha!
what a loser.
Who in their right mind would want to stay in that dump. Between Nice places on the strip, and classy old places like the Golden Nugget, not sure what value Greek Isles is adding to the town.
Well located, though functionally obsolete. Implosion time.
Maybe Boyd will pick this property up at a really good deal.
$12 million sounds about right.