April 6, 2005
Mail Stop 0409
Robert R. Black, Sr.
Chief Executive Officer and Manager
Virgin River Casino Corporation, RBG, LLC and
B & BB, Inc.
911 North Buffalo, Suite #201
Las Vegas, Nevada 89128
Re: Virgin River Casino Corporation, RBG, LLC and B & BB, INC.
Registration Statement on Form S-4 filed March 7, 2005
File No. 333-123179
Dear Mr. Black:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. Please submit a letter from Virgin River Casino Corporation,
RBG,
LLC and B & BB, Inc., that includes the representations outlined
in
the Staff`s Exxon Capital Holdings Corporation (avail. April 13,
1989), Morgan Stanley & Co. (avail. June 5, 1991) and Shearman &
Sterling (avail. July 2, 1993) No Action Letters.
2. Please supplementally provide us with copies of any graphics,
maps, photographs, and related captions or other artwork including
logos that you intend to use in the prospectus. Such graphics and
pictorial representations should not be included in any
preliminary
prospectus distributed to prospective investors prior to our
review.
3. We note your use of "CasaBlanca Resorts" throughout the
prospectus. The use of CasaBlanca Resorts is vague and confusing
given that Casablanca Resorts, LLC is a subsidiary of Virgin River
Casino Corporation (based on your disclosure in Exhibit 21.1) and
one
of the casinos owned by Virgin River. Please revise to use your
actual name or a less confusing shortened version throughout your
document.
4. Please supplementally provide us with a copy of the
industry/market information used in connection with the
preparation
of the registration statement. For instance, we note that you
rely
heavily on data from the Nevada State Gaming Control Board.
Please
provide us with copies of the materials that support the data you
used.
5. Please supplementally provide us with support for claims made
or
beliefs stated. For instance, on page 50 you state that you
"believe
that the Eureka features approximately 720 slot machines, 11 table
games and 210 hotel rooms." In addition, please provide support
for
your belief that you have a dominant market share in the Mesquite
area and that Mesquite is "rapidly growing."
Facing Page
6. We note in your calculation table that you list your 9% Senior
Secured Notes as due in 1012. Please revise to indicate they are
due
in 2012.
Table of Additional Registrants
7. We note that Oasis Interval Ownership, LLC, Oasis Interval
Management, LLC, and Oasis Recreational Properties, Inc are not
listed on the chart illustrating your corporate structure on page
6.
Supplementally please reconcile these disclosures.
8. On page 6, it appears that you are listing Casablanca Hotels
and
Casino Properties and Operations and Virgin River Hotels and
Casino
Properties and Operations as subsidiaries. On page 100, you state
that the Senior Secured Note Indenture provides that "all of the
Issuers` present and future Subsidiaries will (i) jointly and
severally guarantee all principal of and all premium, if any, and
interest (and Liquidated Damages, if any) on the Senior Secured
Notes
on a senior secured basis" However, in this section you do not
list
Casablanca Hotels and Casino Properties and Operations and Virgin
River Hotels and Casino Properties and Operations as guarantors.
Please revise or advise.
Incorporation of Certain Documents by Reference, page i
9. You note that "[a]ll documents and reports filed by Virgin
River
Casino Corporation, RBG, LLC and B & BB, Inc. pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date
of this prospectus and prior to the termination of the exchange
offer
to which this prospectus relates shall be deemed to be
`incorporated
by reference` herein and to be a part hereof from the date of the
filing of such documents and reports." Please note that based on
your lack of Exchange Act reporting history you do not qualify to
incorporate Exchange Act reports by reference. Refer to the
requirements of Form S-2 and S-3. Please revise to eliminate
this
section.
Forward Looking Statements, page ii
10. Since you are not eligible to rely upon the safe harbor for
forward-looking statements found in Section 27A of the Securities
Act
of 1933, it is not appropriate to qualify in their entirety all
subsequent written and oral forward-looking statements
attributable
to the company or persons entitled to speak on behalf of the
company.
Please remove this statement. In addition, many of the bullet
points
on page iii are largely repetitive of the risk factors included in
the prospectus and are not directly related to forward-looking
statements made in the S-4. Please revise accordingly.
Prospectus Summary, page 1
General
11. Please revise your summary to present a more balanced
description
of your business. For example, if you retain the "competitive
strengths" disclosure, balance it with a discussion of your
business
and competitive risks. In addition, please provide a brief
summary
of the most significant risks associated with an investment in the
notes. The cross-reference on page 13 is not sufficient to
provide
balance.
12. We note your summary contains a lengthy description of your
business and business strategy. Further, we note the identical
disclosure appears later in your prospectus. For instance you
"Competitive Strengths" section is repeated verbatim on page 50.
Your summary should not merely repeat the text of the prospectus
section by section, but should instead provide a brief overview of
the key aspects of the offering. You should consider and identify
only those aspects of the offering that are the most significant
and
determine how best to highlight those points. Refer to Item
503(a)
of Regulation S-K, and Part IV.C. of Securities Act Release No.
7497.
13. In connection with the above comment, please revise the
summary
to delete repetitive information found in various portions of the
summary. For example, you discuss your competitive strengths and
information about your casinos and the Mesquite market in a number
of
locations within the summary section. In addition, please revise
the
summary to reduce the level of detail regarding your resorts, your
strategy and the Mesquite market. This level of detail is more
appropriate in the Business section of the prospectus.
14. Please include a statement regarding the accounting treatment
of
the exchange offer. See Item 4(a)(5) of Form S-4. We note your
disclosure on page 77.
The Company, page 1
15. We note your statement that you generated net revenues of
$154.3
million for the twelve months ended September 30, 2004. Since
your
year-end is December 31, please revise to disclose your revenues
at
your year-end rather than at September 30.
Operating Strategy, page 3
16. Supplementally, please tell us whether you have binding
agreements with Starbucks and other entities referenced on page 3
to
add a movie theater, a sushi bar and a Starbucks to your
properties.
The Transaction, page 5
17. You state that "Robert R. Black, Sr. and an affiliate of
Robert
R. Black, Sr. made a $16.0 million equity contribution to us."
Please revise to explicitly state the name of the affiliate.
Corporate Structure Chart, page 6
18. Please revise your corporate structure chart to clearly
indicate
those subsidiaries that also serve as guarantors. Further, please
reflect each party`s ownership interest in you and your parent as
well as your ownership interest in other entities including your
subsidiaries. Revise to show this ownership both on a voting and
economic basis, if different.
19. The corporate structure as presented in this section does not
appear to agree with the list of subsidiaries you provided as
Exhibit
21.1. For instance, in Exhibit 21.1 you list Casablanca Resorts,
LLC
as a subsidiary of Virgin River Casino Corporation. In this
section
you list Casablanca Resorts, LLC as a subsidiary of RBG, LLC. In
addition, B&BB does not appear to be a subsidiary of the
registrant
according to the chart on page 6.
20. In footnote 2 you state that "Robert R. Black, Sr. and an
affiliate of Robert R. Black, Sr. made a $16.0 million equity
contribution to us. To finance $15.0 million of the equity
contribution, the affiliate issued a $15.0 million 8% convertible
senior secured note to Michael J. Gaughan, the Chief Executive
Officer of Coast Casinos, Inc., a subsidiary of Boyd Gaming
Corporation." Please file a copy of all the agreements involving
this transaction (e.g., the Convertible Note Pledge Agreement and
the
Convertible Note Purchase Agreement discussed in Exhibit 2.12) as
Exhibits.
21. We refer to footnote (2) where you state that you are seeking
the
requisite gaming approvals in order to form a holding company that
will wholly own each of the three issuers. Supplementally, please
tell us the status of receiving such approval and what steps need
to
be taken in order to obtain it.
The Exchange Offer, page 7
22. In the paragraph titled Exchange Offer and on the Cover Page,
you
state that "[t]he terms of each of the new notes are substantially
identical to the applicable old notes, except that the new notes
have
been registered under the federal securities laws, are not
entitled
to certain registered rights relating to such old notes and do not
contain provisions for liquidated damages." However, on page 10
you
state "[t]he terms of the new notes to be issued in the exchange
offer are identical to the terms of the applicable outstanding old
notes except that we have registered the new notes under the
Securities Act." Please revise to eliminate this discrepancy.
Ranking, page 11 and 12
23. Please revise your disclosure in these sections to quantify
the
amount of your existing debt that ranks senior to or pari passu
with
the Senior Secured Notes and the Senior Subordinated Discount
Notes.
Terms Applicable to Both Issues, page 13
24. In the paragraph titled Asset Sale Offer, you discuss the use
of
"excess proceeds" in the context of asset sales or an event of
loss
occurring. Please briefly define the term "excess proceeds." In
addition, please clarify when the obligation to repurchase some of
the notes will occur.
Summary Combined Financial Data, page 15
25. We note that your calculation of EBITDA excludes minority
interest expense and the change in fair value of interest rate
swaps.
Explain how these adjustments are in compliance with Item
10(e)(1)(ii) of Regulation S-K or revise your disclosures
accordingly. Note, any measures that deviate from the definition
of
EBITDA in the adopting release must comply with the other
requirements of Item 10(e) of Regulation S-K.
26. We are unclear whether you intend your disclosure of EBITDA to
be
a liquidity or a performance measure. In the paragraph preceding
the
calculation of EBITDA you indicate that EBITDA is "presented to
enhance the understanding of our financial performance and our
ability to service our indebtedness", which implies that the
amount
would be used as both a performance measure and a liquidity
measure.
In a supplemental response to us and in your disclosure, clarify
how
you intend this measure to be used and revise the presentation to
comply with Item 10(e) of Regulation S-K. Additionally, please
explain how you have considered questions 8 and 15 of the
Frequently
Asked Questions Regarding the Use of Non-GAAP Financial Measures
when
preparing your disclosures related to EBITDA`s use as a
performance
measure.
27. Please explain how you have considered the guidance of Item
10(e)
of Regulation S-K when determining whether it was appropriate to
disclose EBITDA on a per property basis. Demonstrate how results
not
used by your chief operating decision maker are useful to
investors.
Summary Financial and Operating Data by Property, page 16
28. Supplementally explain why the Mesquite Star Hotel & Casino
property was not listed in this summary. Also supplementally
disclose whether the Mesquite Star Hotel & Casino property
generated
any revenues for the fiscal years 2001 - 2004.
Risk Factors, page 18
General
29. Please revise the fourth sentence of the first introductory
paragraph to eliminate the implication that all material risks
have
not been discussed, and revise as necessary to include a
discussion
of all material risks in your risk factor section.
30. Please include a risk factor that alerts investors to the fact
that you may redeem the notes at anytime on or after January 15,
2009.
31. In the paragraph titled Exchange Offer on page 7, you state
that
"[t]he terms of each of the new notes are substantially identical
to
the applicable old notes, except that the new notes have been
registered under the federal securities laws, are not entitled to
certain registered rights relating to such old notes and do not
contain provisions for liquidated damages." Please add a risk
factor
disclosing that the new notes are not entitled to the certain
registered rights and do not contain provisions for liquidated
damages. Please note the specific registered rights the new notes
will not be entitled to.
32. On page 44, you state that you "have no intention at the
present
time of entering into any new swaps to hedge the new debt incurred
as
a result of the Transactions. The existing interest rate swaps
will
continue to be ineffective for the foreseeable future; however,
the
Companies believe the ineffectiveness of the existing swaps will
have
no adverse effect on the Companies` ongoing compliance with the
new
debt." Please include a risk factor discussing the fact that your
existing interest rate swaps are ineffective and discussing your
intention not to enter into any new swaps to hedge the new debt
incurred.
33. Please add a risk factor that discusses the company`s breach
of
certain of the covenants contained in its credit facility,
describing
the specific breaches and discussing the effect this may have on
the
ability of the company to obtain waivers in the future. We refer
to
disclosure found on pages F-8 and F-14.
Ability to Service Debt-To service our debt, we will require a
significant amount of cash. If we fail to generate sufficient cash
flow from future operations, we may have to refinance all or a
portion of our debt or seek to obtain additional financing, page
19
34. On page F-13 you note that there was "no availability under
the
revolving credit facility at...September 30, 2004." Please revise
to
indicate the amount available to you under all of your credit
facilities as of the most recent practicable date. Also, please
revise to discuss if there are any restrictions on your ability to
use your credit facilities to make debt payments to debt holders.
35. Please indicate the cash available to you as of the most
recent
practicable date.
Restrictive Covenants-The indentures governing the notes and our
new
senior secured credit facility will contain covenants that
significantly restrict our operations, page 24
36. We note that the instruments governing your indebtedness
contain
restrictions on the incurrence of indebtedness, which are subject
to
a number of qualifications and exceptions. Please expand your
disclosure to briefly describe the material qualifications and
exceptions and discuss whether you intend to incur additional debt
in
compliance with these restrictions. In addition, please revise to
clarify whether your organizational documents contain any
limitations
on the amount or percentage of indebtedness that you may incur.
Dependence on Management-We rely on our Chairman of the Board,
Chief
Executive Officer and President, the loss of whose services could
materially and adversely affect our business, page 29
37. Please disclose whether you have entered into an employment
agreement with Mr. Black.
Environmental Matters-We are subject to environmental laws and
potential exposure to environmental liabilities. This may cause us
to
incur costs or affect our ability to develop, sell or rent our
property or to borrow money where such property is required to be
used as collateral, page 31
38. Please revise to state whether the water supply for the
contaminated properties comes from the ground water that has been
contaminated. In addition, please revise to discuss whether you
could be held strictly liable for the environmental clean-up of
the
contaminated properties.
Capitalization, page 33
39. Please title, if appropriate, the last column as pro forma.
In
addition, explain to us supplementally your basis for adjusting
the
capitalization table to show the impact of the lease termination.
How is the termination directly attributable to the Transactions
discussed elsewhere in your document?
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 36
General
40. Please revise to identify and discuss key performance
indicators,
including non-financial performance indicators, that management
uses
to manage and assess the business and that would be material to
investors. Refer to SEC Release 33-8350.
41. Please confirm that you do not have any off-balance sheet
arrangements. Refer to Item 303(c) of Regulation S-K.
42. Please revise to include a discussion on whether your business
is
subject to seasonality and whether seasonality has had an effect
on
your financial condition or results of operation. We note, for
example, that the net income for the nine months ending September
30,
2003 is substantially higher than the net income for the year
ended
December 31, 2003. To the extent this is the result of
seasonality,
please discuss it.
Nine Months Ended September 30, 2004 Compared to Nine Months Ended
September 30, 2003, page 38
Casino, page 38
43. You state that the "increase in casino revenues was due to the
increase in slot revenues after fees." Please provide additional
detail as to the make-up of the fees you are referring to.
Food and Beverage, page 38
44. You state the "increase in food and beverage revenues was due
to
a 6.8% increase in the price per cover." Please briefly define
the
term "cover."
Promotional Allowances, page 38
45. Please give a brief description of the types of promotional
allowances you have offered.
Liquidity and Capital Resources, page 42
46. If material, disclose any known trends, events or
uncertainties
that have, or are reasonably likely to have, a material impact on
your short-term or long-term liquidity. Refer to Item 303 of
Regulation S-K.
47. Please revise to state whether you are currently in compliance
with the restrictive covenants of the indentures governing the
notes
and your credit facility. If there is a material risk of
noncompliance that would result in making a credit facility
unavailable or accelerating a balance due:
* Discuss with specificity how near you are to violating each such
term.
* Quantify the amount that will be accelerated.
48. Please revise to state the total amount of the senior credit
facility and the amount you have borrowed against that facility as
of
the latest practicable date.
49. On page 37, in the second full paragraph you state that you
"plan
to continue to renovate our facilities, add amenities and remodel
and
expand some of [your] restaurants and spa facilities...For fiscal
years 2005 and 2006, [you] plan to spend an aggregate of
approximately $16.3 million in capital expenditures for hotel room
renovation and refurbishment throughout all of our properties...to
accommodate long-term market growth and high hotel occupancy
rates,
[you] plan to spend approximately $17.5 million in capital
expenditures, beginning in fiscal year 2005, to expand the
CasaBlanca." Please revise to describe whether you have entered
into
any material commitments for capital expenditures relating to any
of
these planned improvements.
Operating Activities, page 42
50. Please revise your discussion of cash flow from operating
activities to discuss the underlying drivers impacting the changes
in
working capital. Simply identifying the components of working
capital
changed does not provide a sufficient basis to analyze your cash
flow
from operating activities. Refer to the Interpretive Guidance in
SEC
Release 33-8350.
Contractual Obligations and Commitments, page 44
51. Please update the Contractual Obligations and Commitments
table
so that it shows your obligations and commitments as of December
31,
2004. Similarly, please update your table on page 48 that shows
your
long-term debt so that it shows debt as of December 31, 2004.
Business, page 49
General
52. Please consider revising your disclosure to include your
website
address(es). Refer to Item 101(e)(2) of Reg. S-K
Mesquite Star Hotel & Casino, page 50
53. You state that the "Mesquite Star has 12,000 square feet of
gaming space." Please revise to disclose whether you currently
have
a license to conduct gaming activities at the Mesquite Star. If
you
do not have a gaming license, please revise to state what your
intentions are in this regards.
Competition, page 53
54. Please revise to discuss the competition you face from other
hotels and dining establishments in the Mesquite area. This
discussion should include your competitive position in these
industries and your principal methods of competition. Also,
please
explain the niche that Eureka caters to and in what ways you
compete
with it.
Legal Proceedings, page 54
55. Please revise the Legal Proceedings section to provide the
status
of the litigation as of the most recent practicable date.
Properties, page 56
56. In footnote one you state that "pursuant to an agreement which
became effective December 15, 2004, RBG, LLC and MDW Mesquite, LLC
terminated the lease." Please supplementally advise why you still
list the property as leased in your properties table or revise as
necessary. Also, please file the agreement to terminate the lease
as
an Exhibit.
57. We refer to footnote (2). Please identify the party with whom
you have the 99-year lease.
Management, page 62
58. Please revise to state how long Robert Black has been serving
as
the Chairman of the Board, Chief Executive Officer and President
of
the registrant.
59. Please revise to state Mr. Black`s, Mr. Hornburg`s, Mr.
Hunter`s
and Mr. Teixera`s terms of office as directors and any period(s)
during which they have served as such. Refer to Item 401 of
Regulation S-K.
Executive Compensation, page 63
60. Please tell us why you have chosen not to include
distributions
and dividends paid to Mr. Black as owner of CasaBlanca Resorts in
the
Summary Compensation Table.
61. Please disclose whether you have any employment agreements
with
your executive officers. If so, please briefly describe the
material
terms and file copies of the agreements as exhibits to the S-4.
Security Ownership of Certain Beneficial Owners and Management,
page
65
62. Please revise to provide the addresses of the beneficial
owners.
Refer to Item 403 of Regulation S-K.
63. You state that you "are wholly owned by Robert R. Black, Sr.,
our
Chairman of the Board, Chief Executive Officer and President, and
his
affiliates." Please revise to explicitly list all his affiliates
that have an ownership interest.
64. Please revise to provide the total number of shares
beneficially
owned and of the number of shares beneficially owned, indicate by
footnote or otherwise, the amount known to be shares with respect
to
which such listed beneficial owner has the right to acquire
beneficial ownership. Refer to Item 403 of Regulation S-K.
Certain Relationships and Related Party Transactions, page 66
65. On page 63, you note that you paid Mr. Black management fees
in
2001 - 2003. Please revise this section to include that
disclosure.
66. On page 5, you state that you received a $16 million equity
contribution from Robert Black and an affiliate. Please revise
this
section to include the material terms of this transaction.
Senior Secured Credit Facility, page 67
67. Please revise to disclose the party you entered into your
credit
facility with. In addition, please disclose the value of your
trailing 12 month EBITDA as of a recent measurement date.
Further,
please briefly define EBITDA as it is understood in the agreement.
The Exchange Offer
Expiration Date; Extensions, page 71
68. You state that the "expiration date of the exchange offer is
____, 2005 at 5:00 p.m., New York City time." As currently
represented the offer could be open for less than 20 full business
days due to the 5:00 p.m. expiration time instead of an expiration
time of midnight on what ultimately may be the twentieth business
day
following commencement. Refer to Question and Answer Eight in
Exchange Act Release No. 16623 (March 5, 1980). Please confirm
that
the offer will be open at least through midnight on the twentieth
business day. Refer to Rule 14d-1(g)(3).
69. We note that you have not included the expiration date of the
exchange offer. Please confirm that the expiration date will be
included in the final prospectus disseminated to security holders
and
filed pursuant to the applicable provisions of Rule 424.
70. We note that you reserve the right to "delay accepting any
notes." Clarify in what circumstances you will delay acceptance
and
confirm that any such delay will be consistent with Rule 14e-1(c).
For example, if you are referring to the right to delay acceptance
only due to an extension of the exchange offer, so state.
71. In the last paragraph, you state if "the exchange offer is
amended in a manner we deem to constitute a material change, we
will
promptly disclose the amendment by means of a prospectus
supplement
that will be distributed to the registered holders of the notes."
Please revise to indicate that, in the event of a material change
in
the offer, including the waiver of a material condition, you will
extend the offer period if necessary so that at least five
business
days remain in the offer following notice of the material change.
72. Please disclose that, in the event the exchange offer is
terminated, delivery of the new notes or return of the old notes
will
be made promptly.
Terms of the Exchange Offer, page 71
73. You state that you "believe that, as of the date of this
prospectus, no holder of notes (other than Jefferies & Company,
Inc.,
which may be our affiliate) is our `affiliate` as defined by Rule
405
under the Securities Act." Please definitively state whether
Jefferies & Company, Inc. is your affiliate and please
supplementally
provide a detailed analysis of how you arrived at that conclusion.
Conditions of the Exchange Offer, page 72
74. We note you may determine in your "sole discretion" whether
certain offer conditions have occurred or are satisfied. Please
revise to include an objective standard for the determination of
whether a condition has been satisfied.
Accounting Treatment, page 77
75. We note your disclosure that fees related to the exchange
offer
will be amortized over the term of the new notes. Explain to us
how
you considered the guidance of EITF 96-19 with respect to fees
paid
to a third party when the modification of debt instruments is not
to
be accounted for as an extinguishment.
Description of Notes, page 80
76. Please quantify the amount of debt that is currently senior to
the Notes or ranks pari passu with the Notes.
Certain Covenants, page 94
77. Remove the qualifier of "certain" before the description of
your
notes` covenants. The prospectus should reflect all material
covenants that limit your rights and the rights of your
subsidiaries
and noteholders.
Governing Law, page 108 and page 156
78. Please revise to discuss that the Senior Secured Note
Indenture,
the Senior Secured Notes and the Senior Secured Note Guarantees
are
also governed by the United States Securities Laws.
Certain Book-Entry Procedures, page 178
79. In the last full paragraph on page 180 you state that the
"information in this section concerning DTC, Euroclear and
Clearstream and their book-entry systems has been obtained from
sources that the Issuers believe to be reliable, but the Issuers
take
no responsibility for the accuracy thereof." Please be aware that
the issuer is subject to liability for information found in the
registration statement, regardless of whether it was obtained from
third parties.
Financial Statements
General
80. Update your financial statements pursuant to 3-12 of
Regulation
S-X.
Combined Balance Sheets, page F-3
81. Tell us how you considered the need to provide a detailed
description of all the pro forma adjustments in the notes to your
financial statements.
Combined Statements of Cash Flows, page F-5
82. Explain how you have considered the guidance in AICPA
Technical
Practice Aid 1300.15 when determining that the change in bank
overdrafts should be disclosed as an operating activity rather
than a
financing activity.
1. Basis of Presentation and Background
83. Please disclose your rationale for presenting combined
financial
statements and advise us of your basis of doing so under GAAP. In
this regard, if applicable, please identify those entities that
represent a control group and explain to readers your basis for
this
conclusion. Refer to the guidance in ARB 51 and paragraph 3 of
EITF
02-5.
84. Advise us how you applied Rule 3-10 of Regulation S-X. What
exemption were you relying upon when you determined separate
financial statements for each issuer and guarantor were not
required
given the minority interest held in RBG, LLC and the affiliate
relationship between B&BB, Inc. and Virgin River Casino Corp? Who
was considered the parent company for the purposes of applying
Rule
3-10?
2. Summary of Significant Accounting Policies
Vacation Interval Sales, page F-8
85. We note that sales incentives provided to buyers are treated
as
services that increase the sales price for computing revenue
recognition. What is your basis in GAAP for your accounting
treatment for these sales incentives and what consideration was
given
to EITF 01-9?
Segment Information, page F-11
86. In a supplemental response please explain how you considered
paragraphs 10 -15 of SFAS 131 in determining that you did not have
separate segments either based on property or function (i.e.
casino
operations versus food and beverage operations).
Recently Issued Accounting Standards, page F-11
87. If applicable, disclose the effects of adopting SOP 04-2 on
the
accounting for your vacation interval sales.
11. Subsequent Transactions and Event, page F-21
88. In a supplemental response, explain to us how you plan to
account
for the debt issuance and the acquisition of the interests held by
certain affiliated shareholders.
89. Explain to us how you plan to account for the termination of
the
lease agreement between RBG, LLC and MDW and your basis in GAAP
for
your accounting treatment. We note from your Capitalization table
that you intend to remove the liability related to this capital
lease. Clarify how you evaluated the transactions subsequent to
the
lease termination, such as the transfer of timeshare units to RBG,
the sharing of revenues and expenses and RBG`s commitment to
advance
funds to MDW. What was your consideration of SFAS 13, FIN 26, and
FIN 46(R)?
Part II
Exhibit Index, page II-2
90. Please file consents from your director nominees. We refer to
Instruction 2 to Item 401(a) of Regulation S-K.
Computation of Ration of Earnings to Fixed Charges, Exhibit 12.1
91. Explain how you have considered capitalized interest in the
current period in calculating the earnings available for fixed
charges. Refer to Item 503(d) of Regulation S-K.
92. Explain how you determined that change in fair value of swaps
was
an appropriate adjustment in calculating total fixed charges.
Refer
to Item 503(d) of Regulation S-K.
Exhibit 99.1 and 99.2
93. In the Form Letter of Transmittal for 9% Senior Secured Notes
and
the 12 3/4% Senior Subordinated Discount Notes, you require the
undersigned to acknowledge that s/he has "review[ed]" the
corresponding offering documents. While the staff does not object
if
an offeror asks note holders if they understand specified material
terms of the offer, we believe it is inappropriate to require them
to
certify that they have generally read or reviewed all of the terms
of
the offer. Please advise us as to the purpose of this language or
revise to delete it.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
Notwithstanding our comments, when the company requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Robert Telewicz, Accountant, at (202) 824-
5356
or Cicely Luckey, Accounting Branch Chief, at (202) 942-1975 if
you
have questions regarding comments on the financial statements and
related matters. Please contact David Roberts, Staff Attorney, at
(202) 942-2811 or the undersigned at (202) 942-1971 with any other
questions.
Sincerely,
Owen Pinkerton
Senior Counsel
cc: Sherwood Cook, Esq. (via facsimile)
Kummer Kaempfer Bonner & Renshaw
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