The Bankruptcy Baron

It’s not easy for those who don’t live in Las Vegas to understand that Sin City, for all its glitz, is a town like any other. A running joke amongst Las Vegas residents begins with an oft-asked question from nonresidents: “So you live in a hotel?” The punch line comes in the smirks and knowing nods between fellow Las Vegans. As one of those insiders, Gerald Gordon can spot an outlander when he sees one.

“I grew up here,” says the renowned Las Vegas lawyer. “So it’s home. It’s where my family is, where my friends are, where I went to high school.”

Following his years as a University of Nevada, Las Vegas, undergraduate, Gordon earned a J.D. from UCLA, gained admittance to the State Bar of Nevada in 1973 and was soon back in Vegas working full-time for Weiner, Goldwater and Galatz Attorneys at Law, learning the ropes of a budding legal practice at a firm that would one day take his own name.

“When I got there, one of the partners in the firm took me aside and counseled me that the age of the general practitioner was coming to an end … that I needed to specialize and find a more specific area where I could practice,” says Gordon, now of Gordon Silver Attorneys and Counselors at Law. “So bankruptcy was it, and it was challenging … part litigation and part negotiation. I really liked that.”

On top of meeting the demands of a changing age, Gordon saw a chance to initiate something else that would be novel for Las Vegas: a thriving bankruptcy practice. At that time, the practice area was dominated by out-of-state attorneys. “More and more, I became involved and saw more and more bankruptcy cases, so I thought this was a good opportunity to finally establish a local bankruptcy practice,” he says.

And that was that. If having become, by 2009, Nevada’s premier bankruptcy attorney, with a record of involvement in literally every hotel-casino bankruptcy that Las Vegas has seen since he began practicing is any indicator, he made the right decision. A defining moment came in 1978 when Gordon represented the Silverbird Hotel and Casino during its debtor proceedings—the biggest, most legally comprehensive case he’d ever been assigned. Following that trial-by-fire was 30 solid years of similarly complex insolvency assignments representing both debtors and creditors for a list of high-profile clients. It reads more like the client list for a long-established firm than just one lawyer.

Since the Silverbird gig, Gordon acted as lead debtor’s counsel for hotel/casino giants Landmark, Stratosphere, Maxim, Aladdin, Riviera, Fitzgerald’s Gaming Corporation and American Wagering Inc. And he’s gone the nongaming route, too, representing debtors and operating trustees from Sunworld International Airways, Pegasus Gold Corporation, Carson Wayne Newton and Mega-C Power Corporation.

“Mega-C was one of the most difficult,” he says with a sigh, remembering a case that crossed international borders. “It was in Reno, [Nevada,] and it was a stock fraud case that actually originated in Toronto, Canada. It’s hard to explain the complicated new dimension this presented us with, but we did eventually recover these securities for Mega-C shareholders.”

Gordon is now chairperson of Gordon Silver’s business restructuring and bankruptcy department. The economic recession is presenting big new challenges, he says, both in terms of workload and work type. While his cases were about 75 to 80 percent debtor representation, these days he’s 100 percent on the debtor side of the law.

He can’t discuss the cases he’s working on, but the hours spent speak for themselves. Gordon is overseeing cases, doing negotiations, consulting with other attorneys and financial advisers and spending a “tremendous amount of time” engaged in conference calls, from 6 a.m. (“because New York starts at nine …”) to around 10:30 p.m., six days a week.

“Sundays, too, intermittently,” he adds. “There’s really no choice right now.”

“At this point, [Gordon] doesn’t work because he has to … he works because he likes it so much,” says Xroads Solutions Group financial adviser Jeff Truitt, a colleague of Gordon’s since the bankruptcy proceedings of hotel-casino property owner Bally Grand Inc. in 1991. “He loves what he does. And for me, it’s been very helpful working with a bankruptcy attorney of such business acumen … an attorney who’s not just dealing in the realm of legal theory, but in the practical application of the law.”

The work hours won’t change anytime soon, Gordon says, but the work environment will. He’ll soon find himself in the courtroom a lot more often, attending the hearings that are the fruit of all the work he’s doing now. Most of his clients are in the casino industry—that’s nothing new—but, with so many bankruptcy cases being initiated in this economic climate, he’s facing an unusually difficult task in navigating “normal” bankruptcy law along with a whole separate layer of ethical and strategic guidelines associated with Nevada gaming.

“There’s not that much difference, legally,” he says, comparing gaming and nongaming bankruptcy law. “But there is a separate gaming overlay involved. The restructuring has to comply with these gaming laws and regulations, which complicates the whole process, makes it unique.”

If you’re a casino operator, he says, there’s only so much you can do to a property to increase your return. “In this economic environment,” says Gordon, “all a gaming company can really do to maintain its financial stability is to continue to maintain its facilities; freshen its products that are income-generating, primarily its gaming devices and not its room product; maintain its liquidity to the extent possible; and try to manage its costs of funds.” As easy as it may seem for a casino to make money hand over fist, he says, this is still a very competitive business.

“But gaming is very conducive to the bankruptcy process,” Gordon, who doesn’t gamble, says. “[When you are a hotel-casino operator,] your customers get immediate return for their investment. They play a machine or a table and they either win or lose. They pay for a room, they get their product. In other industries, there’s more often a delay between paying and receiving goods or services, and so there can be an issue of customer confidence … confidence that you’re going to receive that product.”

So what does all this gaming-versus-nongaming talk boil down to? Gaming-related bankruptcy proceedings, despite that extra layer of specialized law to consider, can end up moving along with a little more efficiency; it’s a little easier to assess where a company really stands, financially, when there isn’t that delay in customer satisfaction.

Gordon has chosen a demanding specialty, but remains confident even when the odds get a little shaky. In spite of increasing demands posed by a sick economy, especially in a tourism-driven town, Gordon still bets on Vegas.

“We see a three- to four-year trend here,” he says of the downturn. “But I’ve also spent [a career] listening to what a client has to say, analyzing what the client perceives as being success. And I’ve spent a lot of time surrounding myself with a lot of very smart people in the firm. What we’ve done is learn to understand the market and develop an expertise in a very specialized area. We’ve built a very good practice … in Las Vegas, Nevada, of all places.”

In a city where there are few “sure things,” the smart money is still on this guy.