Movie star Kevin Costner may have to sell his Deadwood casino, the Midnight Star.
Circuit Judge Warren G. Johnson issued an order Thursday that appoints a trustee to liquidate the casino, sports bar and restaurant complex. The trustee is to be given complete access to the books and all financial information on the actor's partnership in the business.
Johnson decided earlier that Costner must pay $153,649 to his minor partners in the Midnight Star before he can become the sole owner.
Francis and Carla Caneva, who own 6.5 percent, managed the business until being fired by Costner in 2004. The state Supreme Court said in 2006 that the actor can be forced to sell the swank casino if he does not pay them for their share of the casino.
Dick Pluimer of Spearfish, the Canevas' lawyer, said Costner can stave off liquidation only if he appeals the $153,649 award by the circuit judge. Pluimer said he expected an appeal.
Johnson initially had decided $6.2 million was the fair market value of the Midnight Star, and he ordered Costner to buy the business for that amount or it would be sold on the open market.
The Canevas wanted the value to be higher than the $4.9 million Costner invested in it because only then would they receive anything since the actor is entitled to be paid first if the business is sold.
Costner appealed, arguing that the $6.2 million value wasn't derived from the usual business standard of a hypothetical transaction between a buyer and seller. He also said he could not be forced to sell.
An analyst hired by Costner to place a value on the Midnight Star had estimated its worth at $3.1 million.
The issue eventually wound up in the state Supreme Court, and it ruled in 2006 that the fair market value should be determined by the hypothetical transaction standard. Costner could be forced to sell if he does not pay the amount owed the Canevas after revaluation, the justices added.
Appraisers went to work, and a trial was held last July. Johnson ultimately decided that the Midnight Star has a value of $5,691,000. The building and liquor license are valued at $5.2 million, other assets at $311,000 and gambling devices at $180,000, he said.
The judge said the Canevas are entitled to their 6.5 percent share of the amount available for distribution to the partners on Sept. 14, 2004. The amount available for distribution then was $2,363,840, Pluimer said.
In addition to $153,650 as their portion of the partnership, the couple are entitled to three years of interest earnings, Johnson ruled.
Posted in Top-stories on Wednesday, January 9, 2008 11:00 pm
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