While Hooters has said repeatedly that it should be allowed to reorganize its debts and seek equity capital, Canpartners says the Las Vegas Casino is worth no more than $80 million and that the bankruptcy is a waste of both time and money since the resort is so far underwater on its mortgage that efforts to reorganize are useless.
Innovation Capital LLC., a California-based company, has been marketing the property to potential buyers and it may bring some bidders to the table, but Canpartners seems to have the inside track at the auction. This is because they can potentially foreclose on the property by submitting a “credit bid,” a bid based on the Hooters debt it owns.
“We’ll work with the interested bidders and Canyon,” said Hooters attorney Gerald Gordon. “The issue is to have an orderly transition.”