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November 23, 2014

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Former friend seeks to foreclose on singer Wayne Newton’s home

Lawsuit alleges Newton delinquent on $3.35 million loan secured by Casa de Shenandoah ranch

Wayne Newton

Wayne Newton performs the opening number during the grand opening night of Wayne Newton's Launch slideshow »

Las Vegas Motor Speedway executive O. Bruton Smith is suing singer Wayne Newton, charging Newton is delinquent on a $3.35 million loan and seeking to foreclose on Newton’s Casa de Shenandoah ranch in Las Vegas.

The lawsuit was filed in Clark County District in Las Vegas Feb. 9 by Smith, chairman and chief executive of Speedway Motorsports Inc., against Newton, his wife, Kathleen McCrone Newton, Newton company Desert Eagle LLC and a Newton Living Trust dated Dec. 19, 2001.

The lawsuit was filed by attorneys Mark Ferrario and Brandon Roos of the Las Vegas office of the law firm Greenberg Traurig on behalf of Smith, whose company based in Concord, N.C., owns tracks around the country for NASCAR and other races.

Smith is also the chairman and chief executive of automotive retailer Sonic Automotive Inc. of Charlotte, N.C.

The suit says that in March 2006, when Wayne Newton and Smith were friends, the Newtons approached Smith and asked him to assist the Newtons and Desert Eagle in obtaining a $3.75 million loan from Bank of America by providing a personal guarantee.

The suit says Wayne Newton planned to refinance existing debt with B of A and that the loan would be secured by Newton’s 38-acre residence in Las Vegas at Pecos and Sunset roads and by a private jet valued at more than $2 million.

“Defendant Newton informed plaintiff Smith that he considered Smith’s personal guaranty of the loan as a formality and that the Newtons and Desert Eagle would sell personal assets to pay off the loan before allowing B of A to pursue Smith for repayment of the loan,” the lawsuit says.

The suit says Smith later guaranteed the loan, which initially was for $3.75 million in 2006 but was modified in 2007 to $3.35 million and was secured by Newton’s residence and associated Las Vegas land, as well as an aircraft described as a Fokker F.28 MK 1000.

The loan was to be repaid by May 30, 2009, but the Newtons failed to pay back all that was due and the loan has been delinquent since then, the lawsuit says.

Smith says in the lawsuit that in October he purchased the loan from B of A and that in November he sent a notice of assignment of the loan and demand for repayment to Desert Eagle, but that the defendants “refused to acknowledge or accept receipt of the demands for repayment.”

The lawsuit asks the court for permission for Smith to foreclose on Newton’s property and asserts allegations of intentional fraud and negligent misrepresentation against the defendants.

“Defendants Newtons and Desert Eagle never had any intention of selling personal assets to pay off the loan, and in fact, allowed the loan to go into default,” the lawsuit said.

“At the time defendant Newton made the...representations, defendant Newton knew or should have known that the Newtons and Desert Eagle did not have sufficient income and assets to pay off the loan and therefore the representations were false,” the suit charges.

A spokeswoman for Newton, who performs at the Tropicana hotel-casino in Las Vegas, said Tuesday she was unaware of the lawsuit and said Newton’s management team typically doesn’t comment on litigation.

Financial problems have dogged Newton in recent years, especially since he lost a 2006 lawsuit filed by former Newton pilot Monty Ward over past-due wages.

Ward eventually obtained a judgment against Newton for $455,250 and has been garnishing the wages of Newton ever since.

Last July, Newton was sued twice in Las Vegas by creditors claiming to be owed tens of thousands of dollars.

In one lawsuit, Newton was accused of failing to pay $32,384 for hay delivered to his Las Vegas ranch, presumably for consumption by his horses at the ranch.

In the other suit, he was accused of owing GMAC $36,999 for a lease on a Cadillac.

The Cadillac suit was dropped, but the lawsuit over the hay remains pending in Clark County District Court, with Newton and his attorneys having filed no response in court to the allegations.

Most recently, officials at a Detroit-area airport in Waterford, Mich., said Newton owes the airport more than $60,000 after abandoning a $2 million plane there more than three years ago and leaving it to gather mold.

It wasn’t clear if the plane in Michigan was the same aircraft used to secure the B of A loan, but it’s known both are $2 million Fokkers.

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