Tuesday, May 5, 2009 | 6:14 p.m.
Financial problems appear to be growing at the downtown Las Vegas Four Queens and Binion's hotel-casinos, with the Four Queens saying it faces potential insolvency because of a dispute with one of its landlords.
The Four Queens on Monday sued landlord Finley Co. after Finley moved to withdraw $1.597 million from Four Queens' bank account because the Four Queens was late on its April rent.
The lawsuit, filed in Clark County District Court, also names Nevada State Bank as a defendant. The Four Queens is seeking a court order blocking Finley from taking the money out of its account; and an order barring Nevada State Bank from transferring the money to Finley.
None of the defendants have responded to the lawsuit.
Court papers show the problem started when the Four Queens was late on its April rent and that on April 27 Finley, through its Las Vegas attorney John Steffen of the firm Hutchison & Steffen, demanded immediate payment of $57,141.
But three days earlier, the lawsuit says, Finley had instructed Nevada State Bank to draw on two letters of credit totaling $1.597 million the Four Queens had put up years ago as a security deposit.
In an April 30 letter to Finley, Four Queens owner Terry Caudill said the Four Queens had paid not only the late April rent but its May rent as well. He asked that Finley stop trying to draw on the letters of credit.
"Please be advised that a wrongful draw will cause the company to be rendered insolvent,'' he wrote.
Monday's lawsuit said: "Defendant Finley has failed to withdraw its wrongful request, which is in breach of the lease agreement and threatens the continued solvency of plaintiff Four Queens.''
In the meantime, Finley has become at least the third landlord to reject a request that the Four Queens and Binion's have their rent lowered so they can get through the recession that has hurt their financial performances.
Attorneys for the landlords say Caudill has been seeking rent concessions; and two separate groups of landlords represented by Las Vegas attorney John Peter Lee have rejected those requests for both the Four Queens and Binion's.
The Binion's landlord last week sued that property and is seeking an appointment of a receiver to oversee its finances.
Finley has also rejected the request for the Four Queens.
"It appears that you have attempted to unilaterally change the agreed rent payment as set forth in the lease,'' Steffen said in his letter to the Four Queens. "Your attempts to do so are rejected.''
Lisa Robinson, a spokeswoman for Caudill's casino company TLC Casino Enterprises, last week said the company could not comment on pending litigation.
The Binion's lawsuit says Binion's has been asking for rent concessions since February.
Attached to the Binion's suit are letters from Brian Arlin, TLC's senior executive director of finance, who wrote: "Operating revenue from our casino has substantially declined and it is no longer possible for TLC Casino Enterprises to meet its obligations under the lease."
The letters indicate TLC has made similar requests for concessions from other landlords and that it has cut staff and expenses to the point where additional cuts would hurt customer service and drive business away.
"Without an adjustment of rents to a fair market level, our hotel-casino operation faces an uncertain future," one of Arlin's letters said.
The Binion's landlord, however, said in its lawsuit that the defendants have failed to pay the entire lease payment and that a receiver should be appointed to supervise the property.
"The defendant has not confirmed and cannot confirm the allegations made by the defendant of its inability to pay the rent called for by the lease agreement and plaintiff is accordingly unable to determine whether it's in its best interest to allow the defendant to continue in possession without payment of the full amount due under the lease agreement," the lawsuit says. "In order to assure that the income from the defendant operation, including the hotel, gaming casino and other income-producing activities on the leased property be utilized to the best possible benefit, a receiver of the affairs of the defendant should be appointed so that its affairs can be monitored and reported to plaintiffs and the court."
Binion's Gambling Hall has been a landmark in downtown Las Vegas for more than a half a century. The 80,000 square foot casino opens up to Fremont Street Experience and features 80-plus gaming and poker tables and about 800 slot and video poker machines.
Benny's Bullpen Sports Bar and Cigar Lounge is an old fashioned saloon featuring a full-service bar that serves handcrafted beers, a fine selection of cigars, 10 plasma TVs broadcasting live sports and video poker machines.
The Top of Binion's Steak House is open at 5 p.m. and is located high above downtown Las Vegas on the 24th floor.
The pool area is located on the 25th floor, affording a view of downtown and the Strip. It is also available for concerts, special events and weddings.
The property is made up of three historic buildings: The Apache Hotel, The Boulder Club and The Mint. Benny Binion bought the Apache Hotel in 1951 and renamed it the Horseshoe Club. Benny Binion's sons completed the existing footprint in 1988 when they bought Del Webb's Mint Hotel.