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Binion Deal Unsigned

16 Jan 2004

By Rod Smith

LAS VEGAS -- Binion's Horseshoe owner Becky Binion Behnen resolved one question Thursday evening when she issued paychecks to about 425 Culinary Local 226 workers.

Larger questions surfaced, however, with reports from informed sources that she has failed to sign or discuss a definitive sales agreement that was delivered to her Tuesday by prospective buyer Harrah's Entertainment.

Downtown business and political sources said they have heard no discussions to suggest the sale of the landmark property to Harrah's was falling through or was being reconsidered by Behnen.

Wall Street analysts familiar with such transactions joined downtown businessmen in saying an incredible volume of paperwork needs to be completed for a deal like this.

One analyst asking not to be named said procedural delays are to be expected in any such transaction, "especially when you're dealing with an entrepreneur like Becky."

The delay in signing off on the deal, however, means nonunion workers, vendors and creditors are still unpaid, and guests with upcoming reservations at the Horseshoe are still in the dark about when the property may reopen.

Harrah's delivered a definitive agreement to Behnen Tuesday to buy the Horseshoe, along with documents to provide the financing to cover immediate obligations including worker pay, sources close to the deal told the Review-Journal.

But, the Culinary workers paid Thursday were issued normal Binion's Horseshoe paychecks with no guarantee from Harrah's.

Sources said Harrah's offered to make available whatever funds were needed to cover the 52-year-old hotel-casino's obligations once Behnen signed the sales and related papers.

As of Thursday, however, Behnen had not signed the definitive and loan agreements, and sources said no discussions were under way to finalize the deal.

"The ball is in her court," sources said.

Reached at home Thursday evening, Behnen, referring to her not being accessible for comment since last weekend, said getting her on the phone was "like hitting keno, but I'm not going to comment."

Behnen said she had signed a confidentiality agreement that bars her from commenting on the proposed sale or discussing her intentions for the Horseshoe.

Culinary spokesman Jim Bonaventure said the union workers were due to be paid Thursday, although an unexplained problem delayed the final payments for a few hours. Because of the delay, the Horseshoe dispersing office was kept open until 7 p.m. to make sure all workers who showed up were issued checks.

He said the checks were being drawn on Behnen's own corporate account at Wells Fargo, but the union had no way of making sure the checks were covered or had been guaranteed.

Sources close to the purchase said Harrah's had not transferred any funds to Behnen or the Horseshoe and had not made any guarantee since the definitive agreement remains unsigned.

Sources close to the Binion and Behnen families confirmed workers are being paid without any loans or guarantees from Harrah's.

Harrah's spokesman Gary Thompson said his company was very pleased that some workers were being issued final paychecks Thursday afternoon.

Security guards were at the site, and employees receiving their checks declined to comment.

One nonunion employee who was turned away, however, said he was "treated like dirt. The union juiced (the payments) and I was told pay was for union (employees) only."

About 200 workers were paid earlier in the week and another 300 non-Culinary workers are still owed paychecks next week.

Reports said Harrah's had also agreed to pay the electric bill to turn the lights back on at the Horseshoe starting Tuesday night, but sources said Behnen ordered the lights back on and Harrah's will cover the cost only if the acquisition is completed.

Sources close to the deal said funds were available to pay Nevada Power Co. as well as other creditors and vendors, but no money will be made available by Harrah's until Behnen signs the definitive agreement.

With a final sales agreement still pending and in response to countless telephone calls to Harrah's Las Vegas, the Rio and corporate headquarters, Harrah's Thursday afternoon set up an information hot line: 407-6123.

"We decided it'd be best to establish a central number. As we receive information, we will update the information (hot line)," said Harrah's spokesman David Strow.

He said the largest number of inquiries were coming from Binion's Horseshoe employees who wanted to know about the status of their jobs and pay checks.

"Unfortunately, we won't have any further information until we have a definitive agreement signed," Strow said.

Vendors, creditors and prospective guests with reservations also were inundating Harrah's with questions Wednesday and Thursday, he said.

No decision can be made with regard to paying vendors and creditors until an agreement is signed, and guests with reservations are being told to make alternative arrangements if they have reservations for rooms in the next month.

Federal marshals forced the Horseshoe to close last Friday night by seizing about $1 million from the casino's cashier's cage to cover about $2 million in unpaid union health and pension payments.

Harrah's on Monday announced plans to buy the hotel-casino from Behnen for an estimated $50 million, most of it in the form of assumed liabilities held by the landmark downtown property.

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