|REGENT LAS VEGAS GOES CHAPTER 11
Tuesday, November 21, 2000
By DAVE BERNS
lasvegas.com GAMING WIRE
LAS VEGAS - The 16-month-old Regent Las Vegas has filed
11 bankruptcy protection, citing as the primary culprits construction
delays and cost overruns before the property's July 1999 limited
The much-anticipated Tuesday move followed a September
$5 million worth of payments owed creditors that led to restaurant
closures, the layoff of 259 workers and the departure of a Regent
president who held his job for just two months.
In recent weeks, executives of the Summerlin property's
company, Swiss Casinos of America, have been talking with creditors
to renegotiate repayment of the property's $220 million debt package.
"Given the late start we had and all the constructions
not sure if it's much of a surprise for anyone," interim Chief
Executive Officer Darrell Luery. "In a way it shouldn't mean
anything. On the other hand ... it could be a very good thing with
all of the debt restructured."
The Regent will remain open, and no layoffs are planned,
property's work force having been reduced from a high of 1,700 to
1,200 following the late October firings.
"They should've done a mass layoffs earlier," said valet
Dolan. "We were grossly overstaffed.
"I don't think there's anyone worried about this. It's
protection than anything."
The privately owned Regent, which opened as The
Summerlin, lists assets of $296.4 million against liabilities of
$365.8 million, according to the U.S. Bankruptcy Court filing.
Chapter 11 is the most common form of bankruptcy and frees
company from the threat of creditors' lawsuits while it reorganizes
Any reorganization plan must be accepted by a majority
Regent's creditors. Unless a bankruptcy judge rules otherwise, the
Regent's management team will remain in control of the business and
The high-end property operated by a company owned by Swiss
businessman Hans Jecklein opened with 286 of its 541 hotel rooms in
July 1999, two of its nine restaurants and no health spa or pool
despite having marketed itself as a golf-spa getaway. Operators say
it wasn't fully open until early this year.
Its owners have since sued general contractor J.A. Jones
Construction because of what the plaintiff characterizes as the cost
overruns and construction delays.
Swiss Casinos of America designed the upscale hotel-casino
vacation spot for well-heeled travelers who frequent vacation hot
spots in Southern California and Arizona.
But critics argued that the property's business plan miscalculated
the Regent's ability to lure vacationers from the megaresorts of the
Strip, where 3,000- to 5,000-room giants operated by mammoth
companies possess the benefits of Las Vegas geography, extensive
casino marketing lists and highly developed hotel reservation systems.
"Initially the property's marketing was a little snobbish,"
nationally known restaurateur Gustave Mauler, who operates Oxo and
Spiedini Ristorante at the Regent. "They wanted to emphasize
five-star service, and they were even too snobbish to call their
buffet a buffet."
Luery, a former Bally's Las Vegas boss who also serves as the
chairman of the Regent's board of directors, said he will continue
the recent effort to reposition the operation as a locals' gaming
property to compete with the offerings of Station Casinos and Coast
"We've got all these people in the Summerlin market,"
"That's where we're going to focus now the base of our business."
In response, Regent operators plan to lower the casino's
blackjack hands from $5 to $2 or $3, and will open a coffee shop and
Observers wonder whether value-driven local customers
will flock to
the property with its high-priced reputation, especially since the
September opening of Coast Resorts' neighboring SuncoastSundance
The Regent is also seeking increased banquet and convention
business to boost its bottom line.
"You have to do two things," said a Wall Street source
anonymity. "You've got to bring in groups that are having a business
function that aren't so concerned about the gaming floor ... and you
have to change your restaurant product for locals to get people at
the right price."
Meantime, Station Casinos, billionaire financier financier
casino owner Carl Icahn and Desert Inn owner Steve Wynn are believed
to be on the sidelines, considering possible purchases of the
property. Icahn owns the property's bank debt and is believed
hold a portion of its bonds.
"Clearly that's one of the options," a knowledgeable source
a sale. "The first challenge is working with the court to do the
things that need to be done, to get it on solid financial footing."
las vegas.com GAMING WIRE writer Jeff Simpson
contributed to this report.
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