Monday, Oct. 11, 2010 | 11:29 a.m.
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Map of Krave
3667 S. Las Vegas Boulevard, Las Vegas
Bids are being accepted for certain assets of the bankrupt Krave nightclub and Harmon Theater on the Las Vegas Strip.
The business, operating at the Miracle Mile Shops/Planet Hollywood Resort property, is owned by Krave Entertainment LLC and filed for Chapter 11 reorganization on Jan. 18 -- saying its revenue was hurt by the recession and construction during 2009 on Harmon Avenue and at CityCenter across Las Vegas Boulevard.
The assets to be sold this month include the nightclub's Clark County liquor license, customer list, inventory, equipment and furnishings. These assets are valued on paper by Krave at $120,450 -- with the liquor license alone valued at $70,000. The company holding the lease with the Miracle Mile Shops is included in the sale, meaning the buyer would be purchasing an ongoing business with a lease in place.
However, a key asset, the Krave brand name, is not included in the sale. If a non-insider were to buy the business, an agreement for use of the Krave name would need to be reached or another name would have to be used. The Krave brand name asset -- which is owned by Krave Entertainment owners Sia Amira and Kelly Murphy through another entity -- is not part of the bankruptcy case.
Records show Amira and Murphy want to maintain control of the club and are the "Stalking Horse Bidder" for the assets to be sold with a bid of $150,000. If higher bids come in on or before an Oct. 27 deadline, an auction for the business is set for Oct. 29. Otherwise, Amira and Murphy can buy those assets for the $150,000.
The sale procedure was approved last week by Bankruptcy Judge Mike Nakagawa in Las Vegas and was signed off on by attorneys for the Nevada Department of Taxation, which says in court papers it's owed some $513,000 by Krave.
Court records indicate that after the sale, the Krave Entertainment LLC entity will be liquidated with proceeds of its asset sales going to the Taxation Department and other creditors owed $3.5 million.
Court records show that one asset excluded from the sale, and that could generate some cash for creditors, is a lawsuit Krave filed last year against Liberty Mutual Insurance Co. in a workers' compensation insurance dispute.
"The debtor believes that a prompt sale will maximize the amount that the debtor, its estate and its creditors may realize for the value of the assets," Krave attorney Robert Atkinson of the Henderson law firm Kupperlin Law Group LLC wrote in a court declaration seeking approval of the asset sale plan.
"Because debtor is otherwise facing liquidation, the proposed sale is in the best interests of the estate for the following reasons: (a) the sale will preserve the debtor’s business enterprise as a going concern, albeit under new ownership, which means employment rather than unemployment for debtor's employees; and (b) the sale will result in a greater overall distribution to creditors in general than a piecemeal liquidation," Atkinson said in the filing.
Records indicate Krave, with August revenue of about $334,000, is operating at a break-even pace on a cash flow basis -- but isn't producing enough income to substantially reduce the $3.5 million in debt.