LAS VEGAS A group of lenders has filed a notice of foreclosure against the 1,500-key Hard Rock Hotel & Casino, Las Vegas.
The lending group, NRFC HRH Holdings LLC, may acquire the property or sell its interest to the highest bidder in a public auction scheduled for Monday in New York City, Las Vegas Review-Journal reports.
Co-owner Morgans Hotel Group warned of the possibility of foreclosure back in November. “Unless the market improves markedly, or the joint venture generates additional liquidity, there is a risk to MHG’s equity position and management agreement, which may be terminated by the lenders in the event of foreclosure or under certain other circumstances,” Morgans said in its third quarter earnings statement.
The 16-year-old property, which completed a US$750 million expansion last year, is owned by Morgans and equity partner CDLJ Merchant Banking Partners.
Global Gaming & Hospitality LLC is advising the lenders in the foreclosing proceedings.
The foreclosure action continues a string of negative publicity for the resort located just off the Las Vegas Strip.
In September, Orlando-based Hard Rock Café International Inc. filed a lawsuit against the resort, alleging that the Hard Rock brand has been damaged resulting from the resort’s notorious party culture. The lawsuit in U.S. federal court in New York seeks to terminate the resort’s licensing agreement.
And in December, Morgans agreed to pay US$650,000 in fines and fees to settle allegations by the Nevada Gaming Commission that resort employees sold drugs to guests and facilitated illicit sex at a nightclub on property.