FX Real Estate Las Vegas subsidiary files bankruptcy to sell property

By Caroline Salls

Pittsburgh, April 22 - FX Real Estate and Entertainment Inc.'s remaining Las Vegas subsidiary FX Luxury Las Vegas I, LLC filed for Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the District of Nevada, according to an 8-K filed Thursday with the Securities and Exchange Commission.

As previously reported, the subsidiary entered into a lock-up and plan support agreement on Oct. 23 with the first-lien lenders under its mortgage loans and LIRA Property Owner, LLC and LIRA LLC, corporate affiliates of FX directors, executive officers and/or greater than 10% stockholders Robert F.X. Sillerman, Paul C. Kanavos and Brett Torino.

According to the 8-K, the Las Vegas subsidiary owns 17.72 contiguous acres of real property located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, which secures its $454 million of mortgage loans.

The Las Vegas property constitutes substantially all of FX Real Estate's business.

The company said the lock-up agreement calls for the orderly liquidation of the Las Vegas subsidiary by disposing of the Las Vegas property for the benefit of the subsidiary's creditors, either under an auction sale for at least $256 million or, if the auction sale is not completed, under a pre-arranged sale to the agreement entities under a plan of liquidation.

The lock-up agreement can be terminated by the lenders if the interim cash collateral order has not been entered by May 5 or the final order has not been entered by June 15.

The lenders can also terminate the agreement if it appears that neither the auction sale nor the plan of liquidation effective date could occur before Aug. 11.

The lock-up agreement can be terminated by the subsidiary if any of the first-lien lenders breach any of their obligations after any applicable notice and cure period.

Either the subsidiary or the agreement parties can terminate the lock-up if the plan of liquidation has not been confirmed by Aug. 10.

Creditor treatment

Treatment of creditors under the pre-packaged plan of liquidation will include:

• Holders of administrative claims, priority tax claims and priority claims will be paid in full in cash;

• Other secured claims will be reinstated;

• Holders of first-lien secured claims will receive a share of cash and a new secured loan; and

• Holders of general unsecured claims and interests will receive no distribution.

Debt details

According to court documents, FX Luxury has $139.64 million in assets and $492.57 million in debt.

The company's largest unsecured creditors include Landesbank Baden-Wurtemberg, New York branch, with a $268.12 million APN claim and Nex Bank of New York, with a $220.82 million second-lien claim.

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. The subsidiary's Chapter 11 case number is 10-17015.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.