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Four Queens files lawsuit against landlord

Downtown Las Vegas casino-hotels Four Queens, Binions involved in rent disputes

Tuesday, May 5, 2009 | 6:14 p.m.

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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."

Discussion: 9 comments so far…

By goingbust

5/6/09 at 10:08 a.m.

Suggest removal

Why are they renting? What other major hotel casino operations don't own the land they are on?
By That_Anonymous_Guy

5/6/09 at 10:19 a.m.

Suggest removal

It's actually quite common downtown. Decades ago, rather than buying up a bunch of small land parcels from a variety of owners, the casino developers simply leased the land and built. Not familar with why they did that, exactly, but I suspect the developers had limited cash and wanted to save money.

Now that the area's been completely developed, the landowners prefer to collect a steady stream of huge rent checks rather than selling the land outright.

If I could collect $250K in annual rent on a $600K land parcel (one of the parcels under Binion's), I wouldn't sell it, either!
By American_Gaming_Guru

5/6/09 at 12:30 p.m.

Suggest removal

Agreed. This is a pretty common arrangement downtown. Binions is made up of the original Horseshoe and The Mint. Both properties (now one) are built on several land parcels.
By LVBear

5/6/09 at 3:32 p.m.

Suggest removal

From the article:

"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."
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The customer service at these dumps is about as bad as it can get. Getting rid of some of the deadwood employees may actually improve it.

Did Mr. Caudill or any of his lackeys ever think that perhaps offering patrons decent games to play, and no sweating the action so much, might bring some patrons back? Instead, they flood the casino floor with insulting ripoffs like single deck blackjack that pays only 6 to 5. Ridiculous. I hate to see boarded up buildings on Fremont Street, but these places are so badly mismanaged they deserve to fail.

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Opinions and Commentary on the Gaming Industry: www.TheBearGrowls.com
By casinokid

5/6/09 at 5:09 p.m.

Suggest removal

Ha souds like the casino's want to amend the agreement!
And to top it off they don't want the landlords to have the security deposit as agreed.
The casino's cite that their business will suffer. How about the landlords business suffering? Further more $250k per annum ain't bad when the casino's where pulling in 5 times that a month, and the casino's have said that it sould be adjusted to a fair market now, I bet they won't agree to an adjustable rent to be adjusted montly when things get better!
Evict the tenants like the holders of homes were they should not have a priviledge simply because they have a business lic.
I'am also shure that if i lost money at the tables and ask for it back because we are in a ression i would be told to take a hike.
By localguy

5/7/09 at 11:51 a.m.

Suggest removal

Don't these landlords realize that if they drive the gaming company out of business that they get no rent? Landlords nationwide in every type of comercial property are working with their tenants to keep their tenants in business. It only makes good business sense to keep your tenants in business so they can pay you rent. It may be reduced rent if the tenants business operations are having difficulty, but it is better than nothing at all.
It just makes me sick to see these landlords hammering their tenant while they are down. They have put former tenants out of business with these huge rents and are trying to do it all over again. These downtown treasures finally have a local owner/operator who takes pride in his establishments and keeps people employed. I hope these landlords can realize that there are jobs at stake for people much less fortunate than the landlords.
By revtomperl

5/7/09 at 5:57 p.m.

Suggest removal

Can't we get along? And in the meantime quit saying some of the loosely supported statements - the local places are not the strip but they do have a steady clientele and they are an affordable part of the city. Common guys - let's get along!
By WPTCher

5/7/09 at 9:45 p.m.

Suggest removal

It is better to have some rent than none at all and several more large empty buildings on fremont street. The Four Queens owner took on Binions and tried to do something with it. Nobody expected a severe economic turn down. I don't see the government rushing in to rescue the Four Queens owner. If those buildings go vacant the rest of the area will suffer substantially for a very long time.
By 911conspiracytheory

5/19/09 at 12:33 a.m.

Suggest removal

As an employee , I can tell you this right now that things had gotten so bad. It feels like your job is no longer safe anymore. Every little mistakes you make will result you in either suspension or termination. No longer will you get verbal warnings. It used to be a great place to work but not anymore. Every employees feel threaten , insecure , fearful. One of my coworker made a comment about management , someone overheard the conversation. The result was 3 days suspension. Another example , one of the girl made comment about temp employees. The temp employees didnt like it so she went up to CM . Next day the full time employee got suspended for 3 days. Not counting all other b.s. mistreats by management. Oh I so hope someone else will take over this company. When things were better , very little did TLC give back to his " little " employees. His greed will eventually catch up to him. Why would anyone in the right mind buy Binions ? That place is a dump. No company ever made profits after Benny gone. If TLC would've just stay put with 4queens . He wouldnt be in this mess right now.