FX Real Estate and Entertainment Las Vegas property sale postponed

By Caroline Salls

Pittsburgh, Sept. 9 - FX Real Estate and Entertainment Inc. said its first-lien lenders have agreed to adjourn the trustee sale of its Las Vegas property to Oct. 21 from Sept. 9 to allow continued discussions with lenders regarding a default on the company's $475 million mortgage loan, according to an 8-K filed with the Securities and Exchange Commission.

The Las Vegas property has been under the exclusive control of a court-appointed receiver at the request of the first lien lenders since June 23.

Under Nevada law, the Las Vegas property can be sold in a trustee sale to satisfy the first-lien lenders' obligations secured by the property, provided the lenders have satisfied the Nevada procedures and further provided that the sale has not been stayed through bankruptcy or other filings or by a consensual delay by the lenders.

The company said it and the Las Vegas subsidiaries are considering all possible legal options, including bankruptcy, in case the discussions with the lenders prove to be unsuccessful.

In addition, the company said it will enter into subscription agreements with some of its directors, executive officers and stockholders who have agreed to purchase a total of 4.17 million units at a purchase price of $0.06 per unit.

The company said the unit purchase price represents the average trading price per share of its common stock as reported on the Pink Sheets over the 30-day period immediately preceding the date of the subscription agreements.

According to the 8-K, each unit consists of one share of the company's common stock, a warrant to purchase one share of the common stock at an exercise price of $0.07 per share and a warrant to purchase one share of the common stock at an exercise price of $0.08 per share.

The warrants are exercisable for a period of seven years.

FX said the total unit sale proceeds will be $250,000, which will be used for working capital and general corporate purposes. The funding of each purchase is expected to take place no later than Sept. 10, according to the 8-K.

Under the subscription agreements, the company has agreed to sell 1.04 million units to chairman and chief executive officer Robert F.X. Sillerman's wife, Laura Baudo Sillerman; 1.04 million units to president Paul C. Kanavos and his spouse, Dayssi Olarte de Kanavos; 1.04 million units to greater than 10% stockholder Brett Torino's affiliate TTERB Living Trust; and 1.04 million units to The Huff Alternative Parallel Fund, LP, an affiliate of another greater than 10% stockholder.

The units will be sold under a private placement.

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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