Asia-Themed Hotel and Casino in Las Vegas Declares Itself Bankrupt

Lucky Dragon Hotel And Casino, a U.S. based gaming property, located on Nevada’s Las Vegas Strip, filed for official bankruptcy on Friday. It put in a re-organization request under the U.S. Bankruptcy Code’s Chapter 11 in Nevada’s U.S. Bankruptcy Court for the District. The property was scheduled to be foreclosed in an auction on February 22 (Thursday), but the developer of the casino decided to file for bankruptcy before that.

 

The Las Vegas Review-Journal reports that the management of the developer claimed in its official bankruptcy documents that sale via bankruptcy court might be the perfect opportunity for preserving and maximizing the value of the property. The resort employing 98 people chose to file for bankruptcy for preserving jobs, ensuring market certainty, and for clearing debts owed to its creditors, reported the court papers.

 

It was in 2016 (November) that the casino resort opened its doors to the public. It was aimed at catering specifically to gamblers from Asia (hence the Asian theme of the hotel). According to the website of Lucky Dragon, the property provides 204 suites and rooms to its guests.

 

A notice of foreclosure was served to the Lucky Dragon Hotel and Casino in the month of January. The Las Vegas Review-Journal reviewed the property records of the hotel and they revealed that the developer, Andrew Fonfa, had taken a mortgage of US$90 million in 2016. The funds were loaned for financing the scheme construction. As per the authorized auction notice, the amount owed on this mortgage is US$48.9 million.

 

The latest report from the Las Vegas Review-Journal has a quote from Samuel Schwartz. He is a lawyer who represents the Lucky Dragon Hotel and Casino LLC. According to the quote, the firm had not anticipated that the filing of a bankruptcy would have an impact on the operations since the property continues to remain open and functional.

 

Schwartz further said that the hotel was working consistently with attorneys and investment bankers in order to restructure or refinance its debt. An announcement had been made by the promoter of the property in the month of January regarding temporarily closing the restaurant and gaming operations for 6 months. In the developer’s words, the property would continue to stay “fully operational”, regardless of the shutting down of the restaurants and gaming operations. The Lucky Dragon Hotel and Casino was the first gaming property to come in Las Vegas following the recession.