Tuesday, April 14, 1998 | 10:30 a.m.
Financier Carl Icahn will have to wait for at least a month to send his plan to restructure Arizona Charlie's hotel-casino to the bankrupt property's creditors.
Station Casinos, operator of four locals properties in the Las Vegas area, also is interested in Arizona Charlie's.
A U.S. Bankruptcy Court judge Monday rejected Icahn's proposal to end the time period within which Arizona Charlie's Inc. has the exclusive right to propose a reorganization plan. The decision gives Arizona Charlie's until May 13 to submit a plan for creditor approval.
It is unlikely that such a plan will be approved, because Icahn owns 51 percent of Arizona Charlie's debt.
The court did grant Arizona Charlie's creditors a victory of sorts by requiring the casino to notify creditors that other plans for the company's reorganization do exist.
The court also rejected an Arizona Charlie's request to extend the exclusive time period by 30 days.
After May 13, anyone will be free to propose a reorganization plan to Arizona Charlie's creditors. All proposals, beginning with Arizona Charlie's, will be considered in an open hearing on June 25 and 26.
Arizona Charlie's declared bankruptcy in November. The company is $55 million in debt. Icahn has bought his majority stake of that debt since the bankruptcy declaration.
At Monday's hearing, attorneys representing Icahn and other creditors claimed the family of Bruce Becker, which owned Arizona Charlie's, has been trying to hold creditors hostage by delaying the bankruptcy proceedings.
"Arizona Charlie's has been in default on its bonds for over a year," said Edward Weisfelner, an attorney representing Icahn. Weisfelner argued the company has used procedural wrangling to delay submitting a plan that will be rejected anyway.
But John Clemecy, representing Arizona Charlie's, said the company has made great progress in the bankruptcy proceedings.
"If we've made the progress that we've made, we should be allowed to (submit our exclusive plan)," Clemecy said.
In the end, the court decided to toe the letter of the law, letting Arizona Charlie's have its entire exclusive period. But recognizing the futility of the effort, the court balanced that decision by requiring the company to notify creditors that there are competing plans.
Several parties are ready to submit alternative reorganization plans, including Icahn and Station Casinos, according to attorneys for several creditors.
Icahn also owns 88 percent of the outstanding debt of the bankrupt Stratosphere Corp., and has been buying up the debt of the Claridge hotel-casino in Atlantic City.
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