Agreement with lenders gives Hard Rock time to deal with debt

By Steve Green

Thursday, Feb. 10, 2011 | 3 p.m.

The owner of the 1,500-room Hard Rock Hotel in Las Vegas today said it's reached a "standstill" agreement with lenders that extends through Feb. 28 -- a deal giving the property some breathing room to deal with its hefty debt and liabilities totaling $1.4 billion.

Hard Rock Hotel Holdings LLC, in a regulatory filing, made its first official comments after it was reported earlier in the week that a threatened foreclosure had been called off and litigation over the possible foreclosure was stayed.

Hard Rock today said that on Sunday, certain company subsidiaries and its key lenders entered into a "standstill and forbearance agreement."

During this period, the lenders "agreed not to take any action or assert any right or remedy arising with respect to any of the applicable loan documents against the subsidiary borrowers or the collateral pledged under such loan documents."

"The parties to the Standstill and Forbearance Agreement are engaged in continuing discussions regarding resolution of the subsidiary borrowers’ obligations under the loan documents and disposition of the related collateral," Hard Rock said in its filing.

Separately, Morgans Hotel Group Co. of New York, manager and a minority investor in the Las Vegas Hard Rock Hotel, disclosed that its chairman, David Hamamoto, is also the chairman and CEO and an equity holder of NorthStar Realty Finance Corp. of New York -- parent of the company that on Jan. 28 had threatened to foreclose on the Hard Rock.

"In light of these relationships, during the third quarter of 2010, the company implemented special governance procedures, pursuant to which Mr. Hamamoto is recused from all board and management discussions and all board determinations regarding the outstanding Hard Rock debt. In accordance with those procedures, all Hard Rock debt related matters were and are being considered by a committee of independent directors of the Board of Directors," Morgans said in a regulatory filing.