BELL — A group of Los Angeles investors canceled an $8-million agreement to buy the financially troubled California Bell Club.
Henry S. Stone, president of the Moraga Investment Group, said Moraga backed out because of a provision in the contract that the Bankruptcy Court would not approve. Stone declined to elaborate on the provision.
The beleaguered card club owes the city of Bell $1.9 million in taxes, but the casino has been in bankruptcy since April. It also owes $53,000 for its quarterly business license fee due in July and for taxes for June and July.
As a result of the cancellation of the agreement with Moraga, the city will have to cut $312,000 in anticipated casino tax revenues from its budget, City Administrator John Bramble said.
Councilman George Cole thinks it is time to get tough with the management that is operating the club while it is in bankruptcy. "If we don't get a payment by the end of August, we will probably revoke the license in September," he said. "It (the casino) has done nothing but tie this community down in so many ways."
In the meantime, the casino has lost another buyer. Stone, a Los Angeles attorney, said his firm canceled the purchase agreement with the casino's partners last month.
"I don't think it surprised me because I have gone through this before," said Sam Torosian, casino partner and general manager. He said he did not know why Moraga called off the purchase agreement and said the club would probably not sue for damages.
"All we're doing at this point is we are getting new names and numbers," Torosian said. "I don't think it's that difficult to find another buyer."
Herbert D. Stern, former president of the Commerce Casino, thinks otherwise. "I believe the present condition of the club, financially and legally, is too confused for a new purchaser to come in and buy," he said. Stern, who last month abandoned plans to buy The Horseshoe Club in Gardena, has recently talked with Torosian about managing the Bell poker club.
Stern said he told Torosian and another member of the club's limited partnership that he could manage the casino and put at least $1 million of his own money into the club to help turn it around. Torosian, Stern said, showed an interest in the idea but nothing has been confirmed.
"Good active management is the key to the whole thing," Stern said, "maybe more important than money." He emphasized that "there's no reason for a prospective buyer to come in and acquire all the problems that are there."
The California Bell Club has over the years been plagued with a series of legal difficulties. In a 1985 profit-skimming scandal two city officials pleaded guilty to conspiring to form a secret partnership with casino investors. In May, 1988, law-enforcement authorities raided the club, the homes of the general partners and the office of the Las Vegas-based consulting firm, Southwest Gaming Corp.
Charges Levied Against Four
Deputy Dist. Atty. Pamela Ferrero said John S. Vukasian, assistant manager of the casino; L. Donald Speer and Michael E. Riordan, both Southwest Gaming executives, and James M. Salerno, a casino vendor, were each charged last month with one count of conspiracy to commit grand theft, two counts of grand theft and one count of attempted grand theft. Ferrero said the Superior Court trial is scheduled for Sept. 9.
One of the club's four general partners, Wing Lou, who was charged with grand theft for allegedly skimming $162,000 by writing club checks to himself, had a Wednesday preliminary hearing continued to Sept. 25, said Deputy Dist. Atty. Robert Kuhnert.
Kuhnert, head of the prosecutor's organized crime and anti-terrorist division, said the legal proceedings against the five defendants is one aspect of a criminal investigation of the club.
He said the Sheriff's Department, which has been the main investigative agency, has not submitted other requests for criminal filings but may do so in the future.