June 22 (Bloomberg) -- A Las Vegas-area development won court approval of a bankruptcy exit plan that raises money for creditors in part with plans to sue the company’s former investors, including billionaire brothers Sid and Lee Bass.
U.S. Bankruptcy Judge Linda B. Riegle said yesterday in Las Vegas that she would sign an order approving the reorganization plan for Lake Las Vegas Resort LLC once minor legal issues have been resolved later this week.
The company, which is building a 3,600-acre residential and commercial project 20 miles east of Las Vegas, expects to leave bankruptcy court protection “within weeks,” spokeswoman Sandra Sternberg said yesterday in an interview.
“Were glad to have reached this point and we’re gratified with the hard work of the various stakeholders,” Sternberg said.
Under the plan, lower-ranking creditors will pursue a lawsuit against the former owners of Lake Las Vegas, arguing that the $460 million they took out of the project left it insolvent. Any money they win would be split with the lenders, who include Credit Suisse Group AG.
Those lenders loaned Lake Las Vegas at least $560 million. That money was used to pay the development’s former owners, including Sid and Lee Bass.
The lower-ranking creditors agreed not to pursue claims against the lenders for arranging the loan.
Bill Reimann, a spokesman for Sid Bass, couldn’t immediately be reached for comment yesterday. The Bass brothers and the other investors have denied wrongdoing, according to court records filed by the company.
Lake, Golf Courses
Lake Las Vegas Resort was to contain 29 neighborhoods, two luxury resorts, a man-made lake and three golf courses.
Under the plan, the company will have access to $29 million in financing to keep operating and a separate $10 million loan to finish a water-pumping station.
The company filed for bankruptcy last year, saying it had debt of as much as $1 billion and $500 million in assets.
The case is In re Lake at Las Vegas Joint Venture LLC, 08-17814, U.S. Bankruptcy Court, District of Nevada (Las Vegas).
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