Lucky Dragon fails to find a bidder

Lucky Dragon, usa, foreclosure, las vegas, finance
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Following two foreclosure auctions in September and October,
The Lucky Dragon has failed to attract any bidders.

The off-strip foreclosed property went up for auction again on 30 October with an opening bid of $35m but while three individuals had pre-qualified to participate, in the end no one put forward a bid.

Situated near the north end of the Las Vegas Strip, the 203-room resort opened in December 2016 and aimed to draw in overseas Asian customers. However, its promoter Lucky Dragon Hotel and Casino LLC filed for voluntary bankruptcy in February.

Michael Brunet, a consultant for The Lucky Dragon’s main creditor Snow Covered Capital affirmed that its “strong preference” was for the resort to sell at the auction.

In a court filing on 30 April, Snow Covered Capital stated that the developers “have been offering their assets to the market” for about a year but were unable “to find a viable purchaser of the property”, which per- haps explains the creditor’s reluctance to take on the task.

Payment could have been one of the issues that put bidders off. Buyers at Las Vegas foreclosure sales almost always pay with cashier’s checks, while Snow Covered Capital wants the bid to exceed the more than $50m in debt it holds.

Hotel-casinos “typically don’t sell this way,” Brunet acknowledged. “You’re talk- ing about a significant amount of money that a buyer has to produce. [But] there is a future for this property.”

David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, explained that the Lucky Dragon was limited by the fact that it only catered to a single customer segment.

“The market they were trying to get into is very competitive,” Schwartz stated.

The venue is situated close to where Malaysia’s Genting group is working on its own Chinese-themed casino property, Resorts World Las Vegas.

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