LAS VEGAS, May 1, 2006 (PRIMEZONE) -- Vestin Mortgage, Inc., the manager of Vestin Realty Mortgage I, Inc. and Vestin Realty Mortgage II, Inc. (Nasdaq:VRTB) ("Companies"), today announced that the bankruptcy plan of Mid-State Raceway, Inc. for Vernon Downs became effective on May 1, 2006.
As a result of the bankruptcy plan becoming effective, the Companies received:
-- New first trust deed notes from the buyer, Vernon Downs
Acquisition, LLC. Vestin Realty Mortgage I, Inc. holds $3.2
million of the new notes and Vestin Realty Mortgage II, Inc.
holds $19.6 million of the new notes. The new notes reflect a
$1.2 million principal reduction payment and a deferred gain of
$171,000 for Vestin Mortgage Realty I and $1,030,000 for Vestin
Realty Mortgage II, Inc. The gain cannot be recognized until the
notes are paid in full. The new notes earn interest at the rate
of 9 percent; the notes are due in 6 months and can be extended
for an additional 6 months by payment of a fee. The notes are
secured by a first trust deed on the Vernon Downs properties and
the notes carry a personal 100 percent guarantee by Jeffrey
Gural, Chairman of Newark & Company Real Estate, Inc. and a 50
percent guarantee by Nevada Gold and Casinos, Inc. (AMEX:UWN).
-- Prepayment of interest on the new notes in the aggregate amount
of $500,000.
-- Delay fees from the date of the bankruptcy confirmation until
the effective date in the aggregate amount of $287,000
-- Payment of past due forbearance fees in the aggregate amount of
$555,000.
In making the announcement, Vestin Mortgage noted that the Companies received forbearance payments from the original guarantors of the original loan during the entire bankruptcy period.
Recently, Vestin Mortgage announced that Vestin Fund I, LLC and Vestin Fund II, LLC unit holders voted to convert the funds to Vestin Realty Mortgage I, Inc. and Vestin Realty Mortgage II, Inc. Vestin Realty Mortgage II, Inc. began trading on the Nasdaq National Market System on May 1, 2006 under the symbol VRTB. Vestin Realty Mortgage I, Inc. is targeted to begin trading under the symbol VRTA around June 1, 2006.