Entity that purchased Wayne Newton’s property placed in bankruptcy

CSD LLC, the entity that purchased entertainer Wayne Newton's Casa de Shenandoah ranch in June 2010 and began renovating it into a Graceland in the desert, was placed in Chapter 11 bankruptcy proceedings Friday after months of legal and internal bickering among the owners.

Court papers detailed that a loan for a maximum $2.5 million, requiring the approval of U.S. Bankruptcy Court Judge Bruce Markell, has been lined up to cover bills as utilities incurred during the case. The lender was identified as Neva Lane Acceptance LLC, an entity controlled by Texas businessman and CSD majority owner Lacy Harber that provided $2 million in financing for the project since June.

Grant Lyon, hired Oct. 4 as CSD's chief restructuring officer, said in an affidavit that the plan calls for putting the Casa de Shenandoah through a "controlled auction," concluding in a final reorganization plan within six months. Whatever is left at that time after paying creditors would be distributed to the owners, said Lyon, a managing partner of Odyssey Capital Group LLC in Phoenix.

CSD, through intermediate entities, is 70 percent owned by Harber and his wife, Dorothy; 20 percent by Newton and his wife, Kathleen; and 10 percent by project manager Steve Kennedy and former girlfriend Geneva Clark.

The initial bankruptcy court papers put the aggregate debt at $10 million to $50 million, but did not give details.

Neva Lane is owed $2.2 million, with another $1 million for leased equipment from Wells Fargo Equipment Finance and $210,000 for legal bills from Lionel, Sawyer & Collins, which represented CSD in Clark County District Court litigation.

By contrast, the papers place the value at $50 million to $100 million.

In the state court case, filed in May, Newton attorneys fought the earlier Neva loans as laying the groundwork to squeeze the Newtons off the property.

"This is another example of death by a thousand cuts on the part of CSD," said attorney Bryce Kunimoto.

But Harber said he had grown tired of the ongoing disputes, which put Clark County District Judge Elizabeth Gonzalez in the position of having to decide such mundane details as whether to build a fence around an electrical box, whether the fence should have a gate and how Newton's Arabian horses should rotate their grazing among the property's six pastures.

"I don't have any hard feelings against the Newtons," Harber said. "At this point, I just want out."

He said he did not know whether he would submit a bankruptcy bid.

Harber paid $19.5 million for the property in June 2010, then completely owned by the Newtons, and has invested a total of $63.5 million into the project, including purchasing adjacent property, cleanup and some construction. Court papers say the total investment is somewhat less than $60 million.

The idea of creating a theme park based on Newton's longtime career as a Strip headliner drew opposition when it was proposed in mid-2010 from neighbors, who did not want a commercial venture in an affluent residential area. Casa de Shenandoah, said in court papers to cover 37.8 acres, is on South Pecos Road south of the intersection with Sunset.

The plan still won approval from the county, but then degenerated into ongoing arguments between the Newtons and Kennedy. Harber said he spends most of the year in Texas.

At this point, Lyon said, "(CSD) generates no revenue and likely never will. (CSD) believes that the development of the Newton museum is a lost cause."

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.