Green Valley Ranch Mismanagement

Greenspun affiliate sues Station Casinos
Green Valley Ranch mismanagement alleged

A longtime and normally profitable business partnership between two of Las Vegas' most prominent families has turned very ugly.

GCR Gaming, an affiliate of the Greenspun Corp., which owns and operates media, land development and gaming companies, filed a motion with bankruptcy court Thursday accusing Station Casinos, which is owned by the Fertitta family, of "wrongdoing" and of "flagrantly and continuously" breaching its "contractual and fiduciary duties" in their joint-venture partnership of the Green Valley Ranch Resort.

The filing alleges Station Casinos executives breached those duties, in part, by directing high-stakes gamblers at Green Valley Ranch to other casinos that were owned solely by Station Casinos.

Green Valley Ranch Resort is jointly owned by GCR Gaming and GV Ranch Station, an affiliate of Station Casinos.

Station Casinos said in a statement Thursday evening that "we are extremely disappointed the Greenspuns have joined the fray of out-of-the-money constituents seeking to bring meritless lawsuits in connection with our bankruptcy proceedings."

Station Casinos said the "threatened lawsuit is nothing more than a desperate attempt and improper attempt by the Greenspuns to gain leverage against Station in our ongoing restructuring discussions with Green Valley Ranch's creditors. We intend to vigorously contest the Greenspuns' baseless claims."

Marc Kasowitz, GCR Gaming's New York City-based attorney, said late Thursday that Station Casinos' actions left the Greenspuns with no choice but to file the lawsuit.

"This motion was filed not to gain leverage in any restructuring discussions or any bankruptcy proceedings," Kasowitz said. "That has nothing to do with why the motion was filed. The motion was filed because of these really egregious breaches of the operating agreement and of the fiduciary obligations that Station has engaged in. Their conduct left GCR with no choice but to file the motion, and we fully expect that we'll be able to obtain the remedies that we're seeking."

Thursday's filing comes a week after GV Ranch Station, which also manages the Henderson resort, filed for Chapter 11 bankruptcy protection.

GCR Gaming contends in the filing that its partner "improperly attempted to forestall the consequences of its wrongdoing through the bad-faith filing of its Chapter 11 petition."

The motion asks the bankruptcy court to remove the Station Casinos affiliate from the joint-venture partnership and allow the Greenspun affiliate to sue Station Casinos outside of bankruptcy court.

Station Casinos filed for Chapter 11 bankruptcy last July to reorganize its nearly $6 billion in debts. That bankruptcy did not include the Green Valley Ranch Resort venture.

The new filing includes a declaration by Greenspun Corp. Chairman and CEO Brian Greenspun in which he alleges Station Casinos "routinely and systematically diverted high-stakes gamblers" from the Green Valley Ranch Resorts to other properties wholly owned by Station.

In one instance, he said, Station Casinos tried to lure a player from Green Valley Ranch Resort to Red Rock Resort by offering tickets to an Ultimate Fighting Championship event.

The UFC is majority-owned by the Fertittas. Lorenzo Fertitta is chairman and CEO of the UFC and sits on Station Casinos' board as vice chairman.

Greenspun also accused Station Casinos of sabotaging Green Valley Ranch's marketing and promotional efforts to "undercut its ability to effectively compete" with Station's own properties.

Greenspun, who serves on the Green Valley Ranch Resort's executive board committee, said in the filing that he met with Station Casinos Chairman and Chief Executive Officer Frank Fertitta III on Feb. 4 and Feb. 10 to discuss his accusations that Station Casinos was undercutting Green Valley Ranch Resort's operations.

Greenspun said Fertitta never disclosed during the Feb. 10 meeting that its GV Ranch Station affiliate already had filed bankruptcy.

After learning of the filing the next day, Greenspun called Station Casinos Chief Development Officer Scott Nielson to ask why he had not been told of the bankruptcy, according to the filing.

According to Greenspun, Nielson admitted "Fertitta had directed (GV Ranch Station) to file bankruptcy to 'protect himself' because (Greenspun) had 'been threatening to sue.'"

In the filing, Greenspun said the Feb. 4 meeting was to give Fertitta a chance to explain Station Casinos' actions before Greenspun began legal action to remove the gaming company as the resort's manager.

According to Greenspun, Fertitta denied the company had engaged in any misconduct and promised to fully disclose details about its actions.

"However, over the course of the following week, Mr. Fertitta and his representatives at Station refused to supply such information, notwithstanding my repeated requests," Greenspun's filing said.

With the Green Valley Ranch joint-venture, the Fertittas and the Greenspuns jointly own and operate Aliante Station, Barley's Casino & Brewing Company, The Greens and Wildfire Lanes and Casinos.

The Fertitta family owns nearly 24 percent of Station Casinos, which wholly owns several other local gaming properties including Sunset Station and Red Rock Resort.

Greenspun's filing said information about Station Casinos' "wrongdoing" came from a Feb. 1 affidavit by former Green Valley Ranch General Manager Timothy Wright. The filing said other parties have corroborated Wright's story. Wright was general manager from April 2008 until December , according to his social networking site, Linked In.

Wright said on his Web page that he "reduced marketing expenses 12 percent at the resort while improving visitation and win 3 percent by significantly improving direct mail gaming and hotel occupancy."

GV Ranch Station listed three creditors, all affiliates of Station Casinos. GV Ranch Station said the creditors are owed between $10 million and $50 million. It estimates its assets at $100 million to $500 million.

The property, which opened in December 2001, has more than $770 million in debt, including a $523 million loan maturing in 2014. It also has a $250 million loan due in 2014.


Las Vegas Casino Families Square Off in Station Bankruptcy

Two prominent Nevada casino-owning families, the Fertittas and the Greenspuns, are making like ultimate fighters in a bankruptcy-court showdown over their jointly owned casino.

In one corner is casino operator GCR Gaming LLC, which claimed in a court filing Thursday that Station Casinos Inc. steered high rollers to its wholly owned casinos. GCR is controlled by the Greenspuns, the family that also controls the Las Vegas Sun newspaper.

In the other corner is Fertitta-owned Station Casinos, which is trying to restructure its crushing debt under bankruptcy-court protection. Frank and Lorenzo Fertitta, the brothers who ...