Arizona Charlie’s files for Chapter 11

Monday, Nov. 17, 1997 | 12:47 p.m.

Arizona Charlie's Inc., operators of a Decatur Boulevard resort long at the center of controversy over the proliferation of neighborhood casinos, has filed for bankruptcy.

However, it appears the move for Chapter 11 bankruptcy protection has little to do with whether locals are supporting the resort in the mixed residential/business area, but rather was necessary because of an apparent bad investment in a Missouri riverboat.

Bruce Becker, who in 1987 rebuilt Arizona Charlie's hotel-casino from an old lounge and bowling alley, said daily operations of the property will continue during reorganization.

"The filing will not result in any changes in the operation of Arizona Charlie's, and business will continue as usual," Becker, president and chief executive officer, said in a news release.

"There will be no layoffs or other impact on employees. Customers ... will see no difference in the operations of the company as a result of this action."

The company said the filing, Friday in U.S. Bankruptcy Court, was done to give it time "to negotiate a settlement with holders of first mortgage notes issued by Arizona Charlie's Inc., and an affiliated company, Capitol Queen and Casino Inc., in 1993," Becker said.

He said the two companies funded expansion of Arizona Charlie's and construction and operation of a riverboat in Jefferson City, Mo.

While the Arizona Charlie's expansion was completed, Capitol was unable to secure a Missouri gaming license or sell the riverboat, resulting in what the local company called "substantial debt and no liquid resources for repayment."

"Capitol Queen & Casino has been in default for some time under the terms of the bonds it issued in 1993, and claims now have been made against Arizona Charlie's by the holders of Capitol Queen bonds under the terms of a limited guarantee executed by Arizona Charlie's in 1993," Becker said.

"To preserve all of our legal rights to contest the validity and extent of those guarantees, the company had no choice but to file the bankruptcy action."

Becker said his company is negotiating with "various sources" for the funding of all or part of its financial reorganization plans and expects to announce shortly its refinancing terms.

Arizona Charlie's, named for late 19th century gold miner, Indian scout and rodeo star Arizona Charlie Meadows -- Becker's great-great uncle -- has been the center of controversy ever since construction began on the $18 million resort in the summer of 1987.

Area residents, fearing that the resort would ruin the serenity of their neighborhoods and result in an increase in crime and traffic in the area, protested its opening in April 1988.

In 1991, there were protests to the resort adding three six-story towers. Two years later, angry residents again went to City Hall to oppose the closing of Evergreen Avenue to allow the hotel's further expansion.

In recent years, city and county officials have been under pressure not to approve further neighborhood casinos, with opponents using Arizona Charlie's as an example why such resorts should be limited.