Struggling Las Vegas Casino Could Be 'On Verge Of Bankruptcy,' Lawsuit SaysClass-Action Suit Claims SLS Las Vegas Is On The Ropes |
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A relatively new casino on the north end of the iconic Las Vegas Strip could be headed toward bankruptcy, according to a lawsuit filed by a group of investors.
The Las Vegas Review-Journal reported that SLS Las Vegas’ owners are facing litigation from a group of Chinese investors that put money into the project in exchange for U.S. citizenship under a government program. Their lawsuit claims that the casino is “on the verge of bankruptcy.”
The casino, formerly the Sahara, opened in 2014 and reportedly has yet to turn a profit. The Chinese investors put about $400 million into the casino. The casino is currently owned by Stockbridge Capital Group and sbe Entertainment.
None of the 60 Chinese investors have received citizenship yet, according to the suit filed Nov. 30 in federal court in Los Angeles. The lawsuit is seeking $255 million in damages for the plaintiffs, plus costs of pursuing the litigation.
There’s a pending sale of SLS, but Stockbridge Capital Group reportedly said it doesn’t expect the lawsuit will “deter” the deal. Nor does it “anticipate” a bankruptcy filing. Meruelo Group, which owns the Grand Sierra in Reno, agreed in May to buy the struggling Las Vegas casino for an undisclosed price.
“This is a once in a lifetime opportunity to acquire a premier gaming property on the world famous Las Vegas Strip,” Meruelo said at the time in a statement.
The iconic Sahara fell victim to the financial crisis of 2008 and closed in 2011. It had been open since 1952. Despite the reboot, SLS struggled out of the gate, losing more than $80 million in the first half of 2015.
Meruelo, a San Francisco-based firm, reportedly has tried to strike a deal with the Chinese investors to settle the dispute. However, a change to the business arrangement could threaten the chances of receiving citizenship under the investment program, the suit claimed.
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