Lao Holdings continues legal battle on Savan Vegas sale
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GGR Asia | 18 July 2016

Lao Holdings continues legal battle on Savan Vegas sale

Sanum Investments Ltd and its parent company, Lao Holdings NV, say they filed on Friday the latest move in a legal battle concerning the Savan Vegas Hotel and Entertainment Complex – a casino hotel in Savannakhet, Laos.

The legal move opposes what is known as a ‘motion to dismiss’ filed earlier by San Marco Capital Partners LLC, a U.S.-based private investment firm that had been asked by the Laos government to handle the sale of Savan Vegas.

The opposition to the motion to dismiss was filed with the United States District Court in Delaware.

Savan Vegas (pictured) was previously controlled by Lao Holdings and Sanum Investments before the Laos government in 2012 seized the resort operation – claiming that Sanum owed US$23 million in back taxes and penalties – and appointed San Marco Capital Partners as interim management.

Lao Holdings and Sanum Investments claim that San Marco Capital Partners and its president Kelly Gass “failed to uphold their fiduciary obligations”.

Lao Holdings and Sanum Investments filed in May two lawsuits relating to the disposal process of the Savan Vegas complex. One lawsuit was filed with the International Centre for the Settlement of Investment Disputes – an agency affiliated with the World Bank – and one with the United States District Court in Delaware.

“In contravention of the terms of the investment treaty arbitration, the Laos Government unilaterally hired San Marco Capital Partners and Kelly Gass to operate, manage, market and sell Sanum’s valuable Lao gaming assets, which include the Savan Vegas Hotel and Casino and two slot clubs,” said Lao Holdings and Sanum Investments in its Friday press release.

“The defendants, who had no gaming management experience, failed to communicate with the plaintiffs and conduct an open bid process, which would have maximised the sale price of these valuable assets,” they added.

In May, Macau casino services firm Macau Legend Development Ltd said it had reached an agreement with the Lao government to pay US$42 million for the right to operate the Savan Vegas property. The deal also includes the right to a 50-year monopoly on casino operations in three Lao provinces including the one where the resort is located.

An earlier plan by the Lao government to dispose of the casino hotel had involved a tender process, after which a shortlist of six companies had been drawn up.

Sanum Investments and its parent company claim that Savan Vegas assets are being sold to Macau Legend “for a fraction of the estimated value”.

The companies have asked “that the court deny the defendant’s motion to dismiss in its entirety”.

“The unethical and illegal way that San Marco Capital Partners and Kelly Gass have handled the potential sale of our assets is insulting to any person or company trying to do business in Laos. We hope that the court recognises this and denies this motion to dismiss,” said Jody Jordahl, president of Sanum Investments, quoted in the press release.

GGRAsia approached San Marco Capital Partners seeking comment on the matter but had not received a reply by the time this story went online.

source: GGR Asia