Tech billionaire and real estate fanatic Larry Ellison might back away from a deal to buy Frank Sinatra’s old Lake Tahoe casino.
Ellison’s $35.8 million purchase of the faded Cal Neva Resort & Casino has been tied up in court for more than a month, and the Oracle Corp. founder isn’t willing to wait much longer, federal bankruptcy officials warned in a court filing last week.
If Ellison drops out, the Cal Neva would be left in limbo. The 91-year-old resort has been a fixture on Tahoe’s north shore but has out of business since 2013 and is decades removed from its glory days. Its most recent owner, a St. Helena development firm named Criswell Radovan, was attempting a $49 million overhaul, with plenty of Sinatra-era touches, when it ran short of cash and put the property into Chapter 11 bankruptcy proceedings in 2016.
Tahoe officials said they were disappointed that Ellison’s takeover of the Cal Neva is faltering and that renovation of the resort is likely to be pushed further into the future.
“We would love to see that work continue,” said spokesman Tom Lotshaw of the Tahoe Regional Planning Agency, which approved Criswell Radovan’s renovation plans. “It would have ... revitalized it significantly, breathed some new life into the Crystal Bay area.”
Eric Goldberg, a lawyer representing Ellison in the Cal Neva bankruptcy, declined comment.
Ellison and his estimated $43 billion net worth swooped into the Cal Neva case a few months ago. His personal investment company, Lawrence Investments of Walnut Creek, won bankruptcy court approval Oct. 16 to buy the resort. No one else bid against him.
It looked like another big splash for Ellison, whom the Wall Street Journal once dubbed “one of the nation’s most voracious consumers of trophy real estate.” He reportedly bought Hawaii’s Lanai island in 2012 for $500 million and owns homes in Japan, Rancho Mirage and elsewhere. At Tahoe, he sold a home in Snug Harbor for $20 million in 2014 and has been building an 18,000-square-foot home in the north shore.
In the Cal Neva, he’d be getting his hands on a place loaded with history. After buying it in 1960, Sinatra turned the Cal Neva into a playground for himself and entertainers such as Dean Martin and Sammy Davis Jr. Sinatra lost his casino license and sold the property in 1963, after an FBI agent spotted Chicago mobster Frank Giancana at the resort.
It wasn’t clear what plans Ellison had for the Cal Neva, which straddles the state line and features a 10-story main tower. Within days of his winning court approval for the deal, the purchase ground to a halt. Two of the Cal Neva’s creditors launched formal protests of Ellison’s purchase, saying the deal wasn’t fair to them. A federal judge ordered a stay Oct. 28 while their protests are heard, preventing Ellison from wrapping up the deal.
The U.S. Trustee, an arm of the Justice Department that oversees bankruptcy cases, now says Ellison is about out of patience.
“The US Trustee is informed and believes that the stay of the proposed sale is for a longer period of time than the proposed buyer will accept,” Assistant Trustee Nicholas Strozza wrote in a court filing last Friday.
Strozza is asking the judge to throw the entire bankruptcy case out of court. That would essentially force all parties to start from scratch. A hearing is set for Jan. 30 in Reno.