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November 28, 2014

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Council briefed on Lake Las Vegas bankruptcy

In split vote, Henderson City Council decides to meet in closed session for update on proceedings

Steve Kirk

Steve Kirk

Arthur A. "Andy" Hafen

Arthur A. "Andy" Hafen

Map of Lake Las Vegas Resort

Lake Las Vegas Resort

1600 Lake Las Vegas Pkway, Henderson

The Henderson City Council held a controversial closed-door session Tuesday night for a briefing about the Lake Las Vegas bankruptcy proceedings.

Over the objections of council members Steve Kirk and Kathleen Boutin, the body voted 3-2 to enter the closed session, which City Attorney Elizabeth Quillin said was intended to bring the council up to speed on the resort’s bankruptcy case.

The Lake Las Vegas resort filed for Chapter 11 bankruptcy in July 2008, and has been going through reorganization proceedings ever since. Earlier this month, the resort’s owners filed their reorganization plan, which is the document that outlines how they plan to emerge from bankruptcy.

Kirk said he understood the need for a briefing, but not the need for it to take place behind closed doors.

“I’ve been brought up to speed and we’ve never gone into a closed session for it,” Kirk said, pointing out that closed sessions are generally related to pending litigation to which the city is a party.

Henderson is listed as one of Lake Las Vegas’ creditors, which number in the hundreds.

“I just want to make certain that your position is that even though we’re not a named party in the lawsuit, we can do this,” Kirk asked of Quillin.

Quillin said the alternative would be to do one-on-one briefings with each council member, which would require the presence of outside attorneys at each briefing and generate a large expense to the city.

“Obviously, the city has an interest in our constituents who live at Lake Las Vegas, which is the reason for this briefing,” Quillin said.

Mayor Andy Hafen, who voted in favor of the closed-door session, said he did so because he believes “very strongly” in the attorney-client privilege.

“It appears to me that if this is a matter of attorney-client privilege, then it’s something that we shouldn’t be discussing out in the open,” Hafen said.

Attorneys from the Transcontinental Corp., which is the previous owner of Lake Las Vegas and still retains ownership interests in some properties at the resort, opposed the closed-door session and called on the City Council to hold open discussions with all parties involved and work toward a mutual solution.

The closed session lasted a little more than an hour.

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