BILOXI, MS (WLOX) - There is a war of words as to what caused paradise to crumble. For the first time, the landowners in the Margaritaville Casino saga are telling their side of the story. Meanwhile, Margaritaville officials have a different version of what went wrong.
For Margaritaville's first year in business, the casino's lease with Clay Point Properties didn't require rent payments. When the first year ended, Clay Point's attorney Don Dornan said owners expected rent checks. The rent payments never started.
"This idea that Margaritaville has tried to paint itself to be the victim in all this is pretty shallow when you look at the fact that they haven't paid any rent, if you look at the list that was disclosed yesterday of all the creditors they have not paid," said Dornan.
Dornan said the amount owed is about $4 million. There is also the issue of property taxes.
"The Clay Point property owners were also required to redeem the property taxes that were required to be paid by Margaritaville, but not paid for another $500,000," said Dornan.
Clay Point's attorney says when Margaritaville wanted to build a hotel, the casino approached the landowners to work out a new lease agreement.
Dornan said, "The Clay Point property owners were willing to try to do that, but Margaritaville was never willing to agree to anything that actually required them to pay rent. So from our point of view they wanted to continue to occupy the property without paying any rent, and that simply would not be acceptable."
Margaritaville's attorney has a much different point of view. Michael Cavanaugh told WLOX the casino group had an outside investor willing to pay $13 million to buy the casino's 10 acre location from Clay Point, and then invest another $65 million in a hotel and other amenities. He said Clay Point rejected that deal and that led to the casino locking its doors, and MVB Holdings to file for bankruptcy.
Clay Point and MVB Holdings were originally set to be in court on Wednesday for a judge to decide if the owners could seize the property for non-payment of rent. The bankruptcy filing on Tuesday changed that. Clay Point now plans to ask a bankruptcy judge for permission to seize the Margaritaville property.
"The Clay Point property owners want to take it one day at a time and so our first objective is to regain possession of the property," Dornan said. "We'll be asking the bankruptcy court to promptly restore possession of the property to the property owners. I don't know that we have made any final decisions beyond that."
Dornan said Clay Point Properties is a group made up of four individual property owners who were leasing to Margaritaville. He said the actual building is only on one of the property owner's land. He said it will be up to his clients after the bankruptcy proceedings to decide if they want to continue to act as a group or handle their properties individually.
Dornan said when this is over there will be no winners.
"I thought it was interesting yesterday that we saw the list of all those creditors. It looks pretty clear that Margaritaville was not paying any or at least not many of its creditors," said Dornan. "That was just the list of the unsecured creditors. Those are the folks that probably won't get anything. People such as the produce distributor or the food supply. Hardworking, well meaning businesses doing the best they can, they're going to get nothing."