Once-High-Living Tustin Developer Files for Bankruptcy : Debt: Michael F. Harrah, who formerly owned a theme attraction near Lake Havasu and collected classic cars, is claiming almost $30 million in liabilities.
Flamboyant Tustin developer Michael F. Harrah--former owner of the English Village theme attraction near the London Bridge at Lake Havasu, Ariz.--has filed personal and business bankruptcy petitions in federal court here, claiming nearly $30 million in liabilities.
Harrah listed only about $8,000 in personal assets and the unspecified value of his 20% interest in the Ramada Lake Havasu resort hotel owned by Harrah Corp. Unlimited as his only business asset.
In his personal filing, Harrah also listed an unspecified debt to the Internal Revenue Service for unpaid federal income taxes from 1985 through 1989.
His attorney, Don Teague, said Harrah--once a high-living multimillionaire--currently lives in a rented home in an unassuming mixed residential-commercial neighborhood in central Garden Grove.
Harrah, who listed a business address in Tustin but who works out of the offices of a Fullerton-based building company, could not be reached for comment.
The 6-foot, 6-inch developer listed numerous lawsuits and judgments by developers and former business associates among his liabilities.
Teague said that in filling out the bankruptcy filings, he listed every possible debt and claim “because we didn’t want to leave anything out.” Thus, he said, Harrah’s personal and corporate liabilities were likely overstated.
A review of some of those debts bears out Teague’s disclaimer.
The suits and claims apparently stemmed mainly from disputes over payments for or performance on various development projects, although the largest is a claim for $10 million in damages by Orange County restaurateur Geril Muller.
Muller is suing over Harrah’s use of the name Ambrosia for a short-lived restaurant he opened in Costa Mesa in 1986. Muller founded the original Ambrosia in 1975 and operated it until 1985.
Harrah later leased the facility from Muller and opened his own restaurant, where the menu featured buffalo and alligator steaks and where a special space was set aside for Harrah to display vehicles from his classic car collection. That collection apparently has been sold, as Teague said Harrah’s only vehicle is a late-model Dodge pickup truck.
In at least two cases, debts listed by Harrah no longer are owed, or even claimed, according to attorneys for the companies listed as creditors.
Harrah’s petition for a Chapter 7 liquidation of his business said the concern owes $3 million to Lakeside Palace Associates in Lake Havasu City and an unspecified amount to an air-conditioning company there.
In an interview Monday, however, the Phoenix-based attorney for Lakeside Palace Associates said the suit by a condominium homeowners group over construction defects was settled more than six months ago when Harrah Corp.’s insurance carrier paid substantially less than $3 million.
And Lake Havasu City attorney Randall Bartlett said that Lake Havasu Air Conditioning was listed as a creditor based on a 1986 suit dismissed in 1987 with no judgment.
One of the larger creditors listed in Harrah’s filings is Western Empire Savings & Loan Assn., an Irvine-based thrift recently seized by federal regulators. The filing says Harrah’s company owes Western Empire $3.2 million. The filings also show a $105,000 debt to American Commerce National Bank in Anaheim.
Teague said that Harrah’s troubles stem from his sale in the late 1980s of most of his interest in what then was called the Queens Bay Hotel in Lake Havasu City.
He said Harrah was to receive $9 million for 80% of the hotel--now the Ramada Lake Havasu resort. But the buyer subsequently went into bankruptcy “and the $9 million cash turned into a $9-million note that (Harrah) couldn’t collect,” Teague said.
