Disclosure Statement and Plan of Reorganization Expected to be Filed
Lake at Las Vegas Joint Venture, LLC and its affiliates, the master developer of the Lake Las Vegas Resort (Lake Las Vegas or the Company) have reached agreement on a plan term sheet with the Official Committee of Unsecured Creditors (Creditors' Committee) and the agent for both its debtor-in-possession (DIP) financing facility in its Chapter 11 cases and the pre-bankruptcy facility and certain lenders under each facility. The term sheet is expected to provide the basis for the Company’s Plan of Reorganization and emergence from bankruptcy.
Provided that discussions with the agents, lenders, and Creditors' Committee continue to progress on a productive basis, Lake Las Vegas anticipates that it will be able to file its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court so that the Disclosure Statement may be considered by the Court at a hearing scheduled for October 15, 2009.
“The Company, the agents and the Creditors' Committee have worked hard to develop the foundation for a Plan of Reorganization that strikes a fair and reasonable compromise for all stakeholders while enabling reorganized Lake Las Vegas to succeed as the real estate market recovers,” said Frederick Chin, LLV president.
“Although there remain issues to work out, we anticipate this agreement will serve as a sound platform for the final round of negotiations on a consensual plan and a timely exit from Chapter 11,” Mr. Chin added.
Under the proposed restructuring, the DIP financing (including the unspent portion) will be contributed to the reorganized Company as capital in exchange for the predominant share of the equity in the reorganized Company; the reorganized Company will have access to an additional $10 million in financing from one or more of the existing DIP financing lenders; the primary pre-bankruptcy secured lenders will receive a minority equity interest in the reorganized Company and a share of certain litigation claims that will be preserved under the plan and transferred to a Creditors’ Trust; and the general unsecured creditors will receive their share of a designated fund together with a share of the litigation claims transferred to the Creditors’ Trust. In addition, the plan is expected to make provision for the completion of certain work financed by local improvement district bonds. The completion of this work would not only enhance the development but would also create a fund to provide for payments to vendors who performed pre-petition services in connection with the relevant infrastructure work.
“This accomplishment is particularly gratifying, given that we had no agreement among the various constituents when these cases commenced 13 months ago and in light of the unprecedented economic and operating challenges that have transpired since,” Mr. Chin said.
John Cork, the chairman of the Creditors’ Committee, added that “Creditors, the City of Henderson, and many other parties that will be directly affected, have been very supportive of the parties’ collective efforts to move forward with a plan.” Lake Las Vegas filed to reorganize under Chapter 11 of the Bankruptcy Code on July 17, 2008 in the U.S. Bankruptcy Court for the District of Nevada in Las Vegas.
The foregoing is a general description of the terms of the plan of reorganization, and is qualified in its entirety by the terms of the plan of reorganization when filed. This notice is not a solicitation with respect to the terms of any plan of reorganization.
Contacts:
Sitrick And Company
Sandra Sternberg
310-788-2850
