Operator of Dunes Hotel Seeks Bankruptcy Shield

The company operating the Dunes Hotel & Casino, faced with a growing number of financial and legal problems, filed for Chapter 11 protection Wednesday in U.S. Bankruptcy Court.

The filing by M&R; Investment Co., which operates the Dunes, placed in limbo a series of legal maneuvers under way against the troubled Strip resort, which remained open for business.

Officials of Las Vegas-based Valley Bank had been scheduled to appear in District Court on Wednesday to ask for a receiver to oversee the hotel, which defaulted in September on a $68.6-million loan. Attorneys for the resort filed the Chapter 11 papers shortly before the hearing was scheduled to begin. The hearing was canceled.

In addition, a federal judge had set a deadline of 5 p.m. Wednesday for the hotel to come up with a $2-million bond to protect the Culinary Workers union.

If the resort had not obtained the bond, U.S. District Judge Lloyd George had said he would lift a temporary restraining order that he granted the hotel last Friday. The order prevented federal marshals from taking $448,000 in cash from the resort’s casino cage to pay on the union judgment.

Gaming authorities had been watching the developments, concerned that the casino would fall below its state-mandated cash balance if federal marshals returned to the hotel Wednesday and removed the cash. Such action would have forced the closing of the casino.

The federal court action was stalled by the Chapter 11 filing.

Bankruptcy papers listed the Dunes’ assets at about $180 million and liabilities at $117 million.

Wednesday’s filing was just the latest in a series of financial problems for Dunes majority owner John Anderson of Davis, Calif.

In September, it was revealed that Anderson was facing lawsuits alleging he had defaulted on more than $56 million in loans, including $32 million to the Eureka Federal Savings & Loan in the San Francisco Bay Area, $22 million to the Crocker National Bank and $2 million to Aetna Life Insurance.