Mego Financial files for Chapter 11

By Carlise Newman

Chicago, July 9 - Mego Financial Corp., doing business as Leisure Industries Corp. of America, and its subsidiaries Leisure Homes Corp., Leisure Services Corp., Leisure Resorts Corp. and Atlantic Development Corp., filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada. The company also said that it expects to present its plan for debtor in possession financing to the court by the end of the week.

Leisure said the filing was made as the prospect of obtaining long-term financing lessened significantly.

The Las Vegas-based travel company has $455,179 in assets, not including investments in subsidiaries, and $39.3 million in liabilities.

Leisure's largest unsecured creditors include Sovereign Bank with $6.5 million in claims in the form of interest rate swaps; Ashford Capital Partners with claims of $2 million in promissory notes; Anvil Investment Associates LP with claims of $2 million in promissory notes; OB Sports with claims of $920,000 in promissory notes, and Providian Bancorp Services with claims of $717,500 in the form of a lease agreement.

Leisure Industries' bankruptcy case number is 03-52300.

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