Eva Longoria’s Las Vegas restaurant and nightclub received a boost in their bankruptcy case Wednesday when a judge gave them more time to exclusively file a financial reorganization plan.
Beso LLC, owner of the Beso restaurant and Eve nightclub at the CityCenter casino-resort complex, has been operating in Chapter 11 bankruptcy since Jan. 6.
The business has been unable to cover payments due on $5.68 million in debt including $2.276 million owed to the Crystals mall at CityCenter.
An attorney for Beso asked Bankruptcy Judge Mike Nakagawa on Wednesday to extend from May 6 to June 24 the period in which Beso alone can propose a reorganization plan.
Attorney Lenard Schwartzer said Beso and Crystals have tentatively agreed on new lease terms that would help the company emerge from bankruptcy. Terms and concessions by Crystals, if any, have not yet been disclosed.
Schwartzer also said Beso has been making progress in the bankruptcy case after spending quite a bit of time successfully fighting efforts by disgruntled investors and former managers Ronen and Mali Nachum to have the bankruptcy case dismissed.
An attorney for investor and creditor Anthony Vicidomine, however, told Nakagawa that Beso has had plenty of time to resolve lease issues with Crystals and still hasn’t finalized them.
Greg Garman, attorney for Vicidomine, said Beso’s exclusivity period shouldn’t be extended as Vicidomine would like to file his own reorganization plan that would involve him infusing "meaningful funds" into the bankruptcy estate.
"The debtor has had its breathing room and now it’s time to see what the market will bear," Garman said.
He said there was no downside to ending exclusivity as Beso could continue negotiating with Crystals – except the possibility that with a competing plan on the table, Beso’s plan would be less likely to receive approval.
Nakagawa sided with Beso, which initially had asked for a 120-day extension of the exclusivity period.
The judge called this a "modest" extension of the deadline of 49 days.
"The court notes there has been substantial activity in the case," the judge said, noting the legal fights with the Nachums. "A brief extension of time in these circumstances is reasonable."
The bottom line for Longoria and her investors is that by having the first opportunity to file a reorganization plan, Longoria and her partners improve their chances of maintaining control of the business.
One reason is because between now and the filing of the bankruptcy plan, they can attempt to line up new financing and concessions from creditors based on information known only to them as insiders.
The right of creditors under the bankruptcy code to file competing plans, in the meantime, acts as an incentive for Beso to offer creditors a reasonable deal in its plan.