By the middle of 1985, Morris was negotiating a $28 million loan to pay for improvements and fire safety updates for the Landmark. Clark County officials considered taking action against the resort because of its failed compliance with fire safety standards. On July 29, 1985, the Internal Revenue Service (IRS) filed a $2.1 million lien against the property, because of Morris' failure to pay withholding and payroll taxes for the resort's employees for the previous six months. Two days after the lien was filed, the Landmark filed for Chapter 11 bankruptcy to prevent the IRS from seizing assets such as casino cage money. The resort remained open despite the bankruptcy filing, and the casino had enough money to remain operational. The Landmark had debts totaling $30.6 million, while it had $30.6 million in assets. Morris blamed the bankruptcy on McGraw, alleging that he derailed a $28.8 million refinancing of the Landmark 24 hours prior to the finalization of the loan. Morris said operations would continue as normal despite the bankruptcy filing.