Hard Rock unit's $96 million loan accelerated, lender plans auction

By Caroline Salls

Pittsburgh, Feb. 3 - Hard Rock Hotel Holdings, LLC's second mezzanine subsidiaries received a notice of acceleration from second mezzanine lender NRFC HRH Holdings, LLC, declaring all $96 million of unpaid loan principal and interest immediately payable, according to an 8-K filed with the Securities and Exchange Commission.

In addition to the acceleration, NRFC told the subsidiaries that it plans to auction off the collateral pledged in connection with the second mezzanine loan on Monday.

However, Hard Rock said it believes that the lender must be approved by the Nevada Gaming Commission as a beneficial owner of the equity of a registered holding company before it can hold the auction.

Hard Rock said it is contesting the foreclosure and auction on a variety of bases.

The lender claims that the second mezzanine subsidiaries have violated loan covenants that require them to remain solvent, maintain adequate levels of capital and not to engage in a transfer.

The second mezzanine subsidiaries include HRHH Gaming Junior Mezz, LLC and HRHH JV Junior Mezz, LLC.

According to the 8-K, the second mezzanine subsidiaries hold all of the membership interests of first mezzanine subsidiaries HRHH Gaming Senior Mezz LLC and HRHH JV Senior Mezz, LLC, and the first mezzanine subsidiaries hold all of the membership interests in the entities that own the Hard Rock Hotel & Casino and related assets.

Hard Rock Hotel Holdings is a Las Vegas casino owner.

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