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A Settlement Agreement Between Horizon Hotel-Casino and Columbia Sussex Affiliates

On April 11th, 2008, a settlement between a Lake Tahoe Hotel-Casino facility requires the affiliates of William Yung's Columbia Sussex Corporation to pay the amount of $165 million over the period of three years to solve the lease problem with Park Cattle Co. The settlement ended the civil trial in Minden that started in February.

Douglas County District Judge Dave Game finished the case involving the Horizon hotel-casino facility but the terms were stated in a statement filed before the U.S. Securities and Exchange Commission Filing. According the SEC statement, $40 million was paid on April 2nd, 2008 by the Columbia Sussex affiliates in Kentucky that are not limited by $960 million in bonds that William

Yung's Tropicana Entertainment LLC issued on January 2007. The bond also help to finance the purchase of the Tropicana casinos in Atlantic City by William Yung and Las Vegas. Yung lost the casino license for the Atlantic City Tropicana in less than a year and the bondholders have filed a lawsuit as a result.

The license was canceled on December 2007 after allegations of problems in cleanliness, non-compliance with the state rules and unnecessary lay-offs. The Nevada case dates back in 2005, when Park Cattle alleged that there was a breach in the land-lease agreement and the Horizon operator, Wimar Tahoe Corporation, alleged a harassment campaign instigated by Park. Wimar Tahoe is an affiliate of Columbia Sussex.

The attorneys for the operators said that Park Cattle, which is a real estate company with land holdings at Tahoe and Carson Valley, wanted to take over the management of the casino and there were no issues regarding safety which is an equivalent to a violation of the lease.

The settlement agreement will also let Park Cattle end their lease for Horizon in 2011 and end their MontBleu lease in 2018 by paying the amount of $15 million. Failing to complete the amount paid to Park on time could result in a liquidation judgment of up to $290 million, aside from the settlement money already paid.

 

Monday, May 05 , 2008
Gerald Kernighan