Organization

9 Months Ended

Sep. 30, 2011

Organization [Abstract]

Organization

1. Organization

NGA HoldCo, LLC, a Nevada limited liability company (the "Company" or "NGA"), was formed on January 8, 2007 at the direction of Newport Global Opportunities Fund LP ("NGOF"), a Delaware limited partnership, for the purpose of holding equity, either directly or indirectly through affiliates, in one or more entities related to the gaming industry. The unaudited condensed consolidated financial statements represent the financial position, results of operations, and cash flows of the Company and its two wholly owned subsidiaries; NGA Blocker, LLC ("Blocker") and NGA Acquisition Co. LLC ("Acquisition Co").

As more fully explained in the following paragraphs, Blocker is a holding company that has elected to be taxed as a corporation. Blocker is taxed on its share of the income from Acquisition Co, unlike NGA where its income flows through to its investors and ultimately to their respective investors. Acquisition Co currently owns approximately a 17.04% interest in Eldorado HoldCo LLC, a Nevada limited liability company ("Eldorado") and a 40% interest in Mesquite Gaming LLC ("Mesquite"), also a Nevada limited liability company. Eldorado owns entities that own and operate the Eldorado Hotel Casino Reno and the Eldorado Resort Casino Shreveport. Eldorado also owns approximately 50% of a joint venture that owns and operates the Silver Legacy Resort Casino Reno (which is seamlessly connected to the Eldorado Hotel Casino Reno) and approximately 21% of a joint venture that owns and operates Tamarack Crossings Casino & Restaurant, a small casino also in Reno. Mesquite is engaged in the casino resort industry in Mesquite, Nevada through its wholly owned subsidiaries that own and operate the CasaBlanca Resort & Casino, the Virgin River Hotel & Casino, two golf courses, a bowling center, and a gun club. Mesquite also owns the Oasis Resort & Casino, which is currently closed.

The Company's one issued and outstanding Class A Unit, representing all of its voting equity, is held by NGA VoteCo, LLC, a Nevada limited liability company ("VoteCo"). All of the Company's issued and outstanding Class B Units, representing all of its non-voting equity, are held by NGA No VoteCo, LLC, a Nevada limited liability company ("InvestCo"). VoteCo is owned by Timothy T. Janszen and Ryan L. Langdon, each of whom owns a 42.85% interest, and Roger A. May, who owns a 14.3% interest. Messrs. Janszen, Langdon and May collectively are referred to as the "VoteCo Equityholders". InvestCo is owned by NGOF and Newport Global Credit Fund LP ("NGCF") (collectively "Newport"), Delaware limited partnerships formed primarily for the purpose of seeking long-term capital appreciation and current income by acquiring, holding and disposing of investments made in distressed debt securities and equities. Newport holds all of InvestCo's issued and outstanding voting securities. At present, the Company has no plans to issue any additional Class A Units or Class B Units.

The VoteCo Equityholders, through VoteCo, control all matters of the Company that are subject to the vote of members, including the appointment and removal of managers. Messrs. Janszen, Langdon and May are the Company's managers and Mr. Janszen is also the Company's operating manager. The Class B Units issued to InvestCo allow it and its investors to invest in the Company without having any voting power or power to control the operations or affairs of the Company, except as otherwise required by law. If InvestCo and its investors had any of the power to control the operations or affairs of the Company afforded to the holders of the Class A Units, they and their respective constituent equityholders would generally be required, in connection with the Company's investments in Eldorado and Mesquite, to be licensed or found suitable under the gaming laws and regulations of the States of Nevada and Louisiana as well as various local regulations in those states.

VoteCo, InvestCo, the Company and each of the Company's wholly owned subsidiaries are managed by Timothy T. Janszen, the operating manager of each entity. NGA Blocker, LLC, a Nevada limited liability company ("Blocker"), is a holding company that has elected to be taxed as a corporation. Because Blocker is a separately taxed, non-flow through entity, Blocker is taxed on its share of the income relating to the Company's investment in Eldorado rather than the Company's investors.

The Company has had no revenue generating business since inception. Its current business plan consists primarily of its holding of a 17.0359% and 40% equity interest in Eldorado and Mesquite, respectively.

Eldorado Acquisition

On December 14, 2007, the date of the closing of its acquisition of a 17.0359% interest in Eldorado Resorts, LLC, a Nevada limited liability company ("Resorts"), the Company transferred in part to Resorts and in part to Donald L. Carano ("Carano"), respectively, free and clear of any liens, ownership of a total of $38,045,363 original principal amount of First Mortgage Bonds due 2012, co-issued by Eldorado Casino Shreveport Joint Venture (the "Louisiana Partnership") and Shreveport Capital Corporation, a wholly owned subsidiary of the Louisiana Partnership (the "New Shreveport Notes"), together with 11,000 preferred shares issued by Shreveport Gaming Holdings, Inc. ("SGH"), then a partner of the Louisiana Partnership that is not affiliated with Resorts or the Company, in exchange for a 17.0359% interest in Resorts. In May 2007, Newport contributed 100% of the New Shreveport Notes held by Newport since August 2006 and 11% of the preferred shares held since August 2006 (collectively, the "Eldorado Shreveport Investments") to the Company. The Eldorado Shreveport Investments were transferred to the Company at the fair value as of the transfer date.

Effective April 1, 2009, Resorts became a wholly-owned subsidiary of Eldorado HoldCo LLC, a Nevada limited liability company ("Eldorado"), when all of the members of Resorts, including Acquisition Co., the subsidiary of the Company through which the Company held its interest in Resorts, exchanged their interests in Resorts for identical interests in Eldorado. Eldorado, which was formed to be a holding company for Resorts, conducts no operations of its own and, other than its ownership of Resorts, has no assets or liabilities.

The Company's acquisition in December 2007 of a 17.0359% interest in Resorts was pursuant to the terms and conditions of a Purchase Agreement, dated July 20, 2007 (the "Purchase Agreement"). The parties to the Purchase Agreement were Resorts, AcquisitionCo, which is the subsidiary through which the Company acquired its interest in Resorts, and Carano, now the presiding member of Eldorado's Board of Managers and the Chief Executive Officer of Eldorado who then held the same positions with Resorts, from whom a portion of the 17.0359% interest was acquired. The closing of this transaction occurred on December 14, 2007 ("Closing") after necessary gaming licenses and approvals were obtained from Nevada and Louisiana, respectively. The Company owns indirectly through its subsidiaries 17.0359% of Eldorado, and Carano or members of his family own directly or indirectly approximately 51% of Eldorado. Carano continues in the roles in the management of Eldorado and Resorts in which he served Resorts prior to Closing.

The 17.0359% equity interest in Resorts acquired by the Company included a new 14.47% membership interest acquired directly from Resorts (the "14.47% Interest") and a previously outstanding 3% membership interest (that, as a result of the issuance of the 14.47% Interest, was reduced to a 2.5659% interest) acquired from Carano (the "2.5659% Interest"). In consideration for its equity interest, AcquisitionCo:

• transferred to Resorts, free and clear of any liens, ownership of $31,133,250 original principal amount of the New Shreveport Notes together with the right to all interest paid with respect thereto after the closing date, and

• transferred to Carano, free and clear of any liens, $6,912,113 original principal amount of New Shreveport Notes together with the right to all interest paid with respect thereto after the closing date and a preferred stock equity interest representing a capital contribution amount of $286,889 issued by SGH.

At closing, Resorts and Carano paid Newport in cash the respective amounts owed to AcquisitionCo for interest on the respective amounts of New Shreveport Notes received at closing that was accrued and unpaid through the date of closing.

Under the terms of the Purchase Agreement, Resorts was entitled, prior to or immediately following the Company's acquisition of its interest in Resorts, to make a distribution to the members of Resorts other than AcquisitionCo of up to $10 million. On July 25, 2007 Resorts made the $10 million distribution to its members which was funded through borrowings under Resorts' credit facility as permitted by the Purchase Agreement.

Eldorado, through Resorts, owns and operates the Eldorado Hotel and Casino (the "Eldorado-Reno") located in Reno, Nevada. Through two wholly owned subsidiaries, Resorts owns all of the partnership interests of the Louisiana Partnership, and operates, pursuant to a management agreement, the Eldorado Shreveport Hotel and Casino in Shreveport, Louisiana (the "Eldorado-Shreveport"), which is owned by the Louisiana Partnership. Eldorado Limited Liability Company ("ELLC"), a Nevada limited liability company 96.1858% owned by Resorts, is a 50% joint venture partner in a general partnership that owns and operates the Silver Legacy Resort Casino ("Silver Legacy"), a hotel and casino property adjacent to Eldorado-Reno. Resorts also own a 21.25% interest in Tamarack Junction, a small casino in South Reno.

Mesquite Acquisition

As a result of a second investment, on August 1, 2011, the date of the closing of its acquisition of a 40% interest in Mesquite Gaming, LLC, a Nevada limited liability company ("Mesquite"), the Company transferred to Mesquite $8,222,222 in cash in exchange for a 40% interest in Mesquite. This $8,222,222 in cash was contributed by Newport to the Company as a capital contribution in July 2011.

The Company's acquisition in August 2011 of its 40% interest in Mesquite was completed upon the transfer to Mesquite Gaming of all of the assets of Black Gaming, LLC ("Black Gaming"), including Black Gaming's direct and indirect ownership interests in its subsidiaries. The assets acquired by Mesquite Gaming included the CasaBlanca Hotel & Casino and the Virgin River Hotel & Casino, each in Mesquite, Nevada, two golf courses, a bowling center, a gun club, restaurants, and banquet and conference facilities. The transfer of the Black Gaming assets to Mesquite Gaming and the acquisition by AcquisitionCo of the 40% Interest were pursuant to a joint plan of reorganization (the "Plan") filed by Black Gaming and its subsidiaries with the United States Bankruptcy Court for the District of Nevada (the "Court") on March 1, 2010, and approved by the Court on June 28, 2010.

Mesquite is engaged in the hotel casino industry in Mesquite, Nevada through its wholly owned subsidiaries C & HRV, LLC (doing business as Virgin River Hotel/Casino/Bingo) and VRCC, LLC and its wholly owned subsidiaries 5.47 RBI, LLC and RBG, LLC (doing business as CasaBlanca Resort/Golf/Spa) and its wholly owned subsidiary CasaBlanca Resorts, LLC (doing business as Oasis Resort and Casino) and its wholly owned subsidiaries Oasis Interval Ownership, LLC, Oasis Interval Management, LLC and Oasis Recreational Properties, Inc.