U.S. Bankruptcy Judge Benjamin Goldgar recently authorized Caesars Entertainment Corporation to dismantle the former Harrah’s casino in Tunica, Mississippi. The ruling is part of Caesars’ bankruptcy case, in which the corporation hopes to restructure or eliminate nearly billion in debt. About 1,000 employees lost their jobs when Las Vegas-based Caesars closed Harrah’s last June. The huge resort opened as Grand Casino Tunica in 1996. Demolition has not yet been scheduled.
Court filings indicate Caesars is seeking to use bankruptcy rules to void its lease with Clarksdale-based Yazoo-Mississippi Delta Levee Board, which collects $3.65 million annually from Caesars for barges docked in Buck Lake, an oxbow lake of the Mississippi River. In addition, one of the three former Harrah’s hotels is on levee board land. The board is Caesars’ seventh-largest unsecured creditor, with $10.5 million due on a lease running through 2017. Caesars has paid some of that money since it filed for Chapter 11 reorganization in January.
Caesars said the levee board has been stalling to keep collecting $304,000 in monthly rent. Caesars added it had tried to sell the property since 2012, but the levee board said after Caesars announced it wanted to demolish Harrah’s, Ravi Bendapudi, a Los Angeles lawyer, told the board he and business partner Wayne Bryan wanted to buy the casino. But, Bendapudi said, Caesars blocked the purchase to avoid competition with nearby Horseshoe Tunica and Tunica Roadhouse Hotel & Casino, also owned by Caesars.
Caesars said it was not interested, describing Bryan in court papers as “less than credible. For example, when asked to provide proof of funds, Mr. Bryan claimed to be working with who he described as a well-funded foreign national and submitted unverified documents from a non-U.S. bank purporting to hold in excess of one trillion dollars,” a Caesars lawyer wrote.
Caesars said it will save $500,000 a month by dismantling the barges and raise additional money by selling scrap and the contents of the 136,000 square-foot casino. For now it must continue to pay rent in order to have access to levee board land to dismantle the barges.
