Cal Neva casino defaults on millions

CRYSTAL BAY, Nev. — The Cal Neva Resort, Spa & Casino is facing potential foreclosure in the coming months while its lawyers are working out details with its financing company to prevent the sale of the property.

“We’re working with the lenders,” said John Harounian, an associate asset manager with the Cal Neva’s ownership group, Namcal. “There are some technicalities we are working through.”

Harounian said he does not know specifics, but is confident the issue will be resolved before the lender, Canpartners Realty Holding Company, can sell the property, which saddles the Nevada and California state line.

In November 2007, Canpartners lent Namcal $25 million with the Cal Neva property as collateral. On Dec. 9, 2008, Fidelity National Title Insurance Company, on behalf of Canpartners, a Delaware limited liability company, filed a default notice with the Washoe County Recorder.

According to Nevada law, Canpartners can sell the Cal Neva three months after serving the notice of default if the debt is not settled within 35 days of the default notice. That would give Namcal until Saturday, Jan. 10, to settle the debt. If the debt still remains, Canpartners could begin selling the property on March 9.

The Washoe County Recorder’s office has not received a notice of sale or a record of a canceled default for Namcal, said Washoe County Recorder Kathryn Burke.

“A lot of times after we see a notice of default, we see a notice of sale, but we have seen no notice yet,” Burke said.

This notice is Namcal’s most recent challenge. Since November 2006 the company has been released from liens from various companies, including Reno-Sparks Convention and Visitors Authority; Reno-based Omboli Interiors Inc.; Arnett & Associates, Inc., in Incline Village; California companies Briggs Electric, Inc.; and kitchen remodeling company TriMark Raygal.

Representatives from Fidelity said they could not comment because of privacy. Representatives from Canpartners were not reached by deadline.

Gaming effects

Although a notice of default does not have any effect on a property’s gaming license, it does cause the Nevada Gaming Commission to look more closely at the property’s operations.

“There are minimum bankroll requirements,” said Frank Streshley, a senior analyst with the gaming commission. “When those kinds of situations occur, it opens our eyes to these properties.”

Minimum bankroll requirements vary from casino to casino based on a formula, Streshley said. To assess if a casino has the necessary funds, the Gaming Commission will send agents to the casino to review its accounts. He could not comment if the gaming commission has investigated the Cal Neva in this way.

Not only in Tahoe

The Cal-Neva’s ownership group, Namcal, is also owed by Namwest, which is owed by Namco Capital Group, a Los Angeles-based investment company owned by Ezri Namvar. Namcal bought the Cal-Neva from former owner Charles Bluth in February 2005, according to Washoe County Recorder documents.

Namvar faces at least 17 lawsuits in Los Angeles Superior court which allege that Namco has failed to pay back investors who gave him from $200,000 to $18 million each, according to court documents. The amount owed to investors could near $400 million.

On Dec. 22 a group of investors filed involuntary bankruptcy against Namvar and Namco.

“I don’t know about those,” Harounian said in response to if these lawsuits would affect Namcal’s ability to settle its debts.