FX Real Estate and Entertainment's Las Vegas property to be auctioned

By Caroline Salls

Pittsburgh, July 16 - FX Real Estate and Entertainment Inc.'s Las Vegas property will be sold in connection with a default on the company's $475 million mortgage loan, according to an 8-K filed with the Securities and Exchange Commission.

The company said the mortgage loan is secured by the Las Vegas property, which makes up substantially all of its business.

The property will be sold at public auction to the highest bidder to satisfy the outstanding obligations to first-lien lenders.

Although the second-lien portion of the mortgage loan is also in default, FX said the second-lien lenders are restricted from exercising default-related remedies as long as the first-lien lenders continue to exercise theirs.

The company said it is considering all possible legal options, including bankruptcy proceedings.

In addition, Gary McHenry has been appointed as the company's principal accounting officer, replacing Stephen Jarvis, who is leaving FX on Aug. 1.

McHenry currently is the controller for the company's Las Vegas.

FX Real Estate and Entertainment is based in New York and is focused on the development of real estate and entertainment-based projects and attractions.

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