Creditor opposes Hooters’ plans to spend more to avoid bankruptcy
Can the Hooters Hotel on Tropicana Avenue be considered a failure? If you ask the resort's main creditor, the answer is yes.
Canpartners Realty Holding Co. IV filed a complaint late Wednesday in U.S. Bankruptcy Court in Las Vegas opposing plans by the Hooters Hotel to spend more money looking for new investors, a sale, or a merger.
"Over the past three years, (Hooters), with the help of an army of high-priced restructuring professionals and financial analysts ... have spent more than $3 million attempting to negotiate ... a reorganization, sale, capital raise or other restructuring transaction outside bankruptcy," Canpartners said in its complaint.
Despite massive expenditures, Canpartners argues, Hooters' efforts "bore no fruit."
Hooters plans to hire Innovation Capital LLC of El Segundo, Calif., to find additional investors or a buyer for the property.
"(Hooters) seek(s) to pay Innovation a guaranteed fee of $35,000 per month, plus hundreds of thousands of dollars in exorbitant additional 'success fees' -- including fees that may be payable even if Canpartners forecloses or a transaction is consummated with an investor not brought to the table by Innovation," according to the 21--page complaint.
Canpartners, an affiliate of Las Angeles-based investment firm Canyon Capital Realty Advisors, also claimed the property is worth about $70 million, but the debt carried on the 696-room hotel is $180 million.
The next hearing in the Hooters bankruptcy case is scheduled for Sept. 14.
