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September 20, 2014

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Residents of bankrupt Lake Las Vegas face uncertainty

Neighbors banding together to preserve their lifestyle, community

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Aaron Thompson/Special to the Sun

A passerby peers into the boathouse at the exclusive Southshore community at Lake Las Vegas.

Lake Las Vegas

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Beyond the Sun

While owners, attorneys, judges and creditors debate the future of the bankrupt Lake Las Vegas resort, a handful of residents are banding together to take a proactive role in the process.

The resort’s future has been cloudy since original developer Transcontinental Corp. defaulted on its loan and was foreclosed on in January 2008.

The Atalon Group subsequently acquired the development and filed for bankruptcy in July, and the Nevada District of Federal Bankruptcy Court has since been swarmed by attorneys and filings on behalf of the resort’s owners and their dozens of creditors.

Only one major decision has been made so far — the January ruling that Atalon could abandon the money-losing Falls Golf Course at the resort’s entrance on Lake Las Vegas Parkway.

Other than that, however, how the resort will emerge from bankruptcy remains largely unknown, residents say, and they’re working to help shape that process and preserve the lifestyle in which they’ve so heavily invested.

“Really, our only problem is the unknown,” said Vicki Hafen Scott, president of the Southshore Homeowners Association, the resort’s oldest community. “But we’re doing our very best to forge the unknown into a positive.”

Though homeowners have no formal representation in the bankruptcy proceedings, Scott and her neighbors have been building a coalition of residents to work together on behalf of their community. They are reaching out to the city of Henderson and asking city officials to act as mediators for the parties involved.

“I think (Henderson) has a vested interest in this community,” Southshore resident Dora Middleton said. “A big one.”

Resident Richard Scott said helping hold the resort together is in the city’s best financial interest.

“It’s a huge tax base,” he said. “And it’s as nice a community as Henderson has.”

The bankruptcy court will handle the financial minutiae, residents say, but they’re hoping the city will act as the glue that keeps the various factions focused on the big picture.

“There are so many factions and so many entities that it’s hard for any one of them to step back and take a look at the big picture, because they’re so caught up in their own spheres,” Southshore resident John Allen said.

Mayor James B. Gibson said the city has been playing an active role in the Lake Las Vegas proceedings and will continue to do so.

“I think the one overarching comment that we’ve made each time and need to make is that anyone that wants to do anything out there needs to come through the city,” Gibson said.

Gibson said the city is in the position to be the go-between for the various parties and will do all it can to help the resort emerge from bankruptcy.

“We cannot allow this project to fail,” Gibson said.

For now, however, all parties involved in the bankruptcy are in a wait-and-see mode. Little can be done until the next major step in the proceedings — Atalon’s filing of the bankruptcy plan that will serve as the road map for the rest of the process — has been completed. The plan is due at the end of the month.

In the meantime, Southshore residents are working on things they can control.

Like the Falls, their community’s golf course will soon go into foreclosure. While the fate of the Falls remains uncertain — the course is being watered and maintained, but what will happen after it is seized by the lender in May has not been established — Southshore residents are working to preserve their course.

Richard Scott said residents have formed a consortium and raised hundreds of thousands of dollars in hope of buying the course outright, buying a controlling interest or, at minimum, keeping it in operation.

“We don’t know if that will happen, but we are in a position to make it happen if the lender is willing to work with us,” Scott said.

Vicki Hafen Scott said she has been encouraged by discussions with Atalon that could set the tone for the resort as it moves forward. Atalon has been good about managing reserve funds for the various homeowners associations, she said, and provided some order at a time when the entire resort could have splintered.

“It could have been much worse,” Scott said. “The fact that (Atalon) stepped into the day-to-day management as if nothing happened has made it much better for the community.”

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