Sale of company to Alliance advances

Thursday, March 7, 2002 | 11:07 a.m.

SUN STAFF AND WIRE REPORTS

WILMINGTON, Del. -- Greate Bay Casino Corp. on Wednesday won authority to sell its Advanced Casino Systems Corp. subsidiary to a unit of Alliance Gaming Corp. of Las Vegas in a deal valued at $14.6 million.

Bally Gaming's ACSC Acquisitions Inc. is purchasing Advanced Casino Systems. Bally is the big slot machine manufacturing subsidiary of Alliance.

Greate Bay provides information-technology services to various casinos in North America through the subsidiary.

Approval of the sale allows the company to move forward on its proposed reorganization plan. Greate Bay is proposing to use the sale proceeds to repay creditors and fund its emergence from Chapter 11 bankruptcy.

At Wednesday's hearing, Chief Judge Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington said he will sign an order approving the disclosure statement on March 20, if Greate Bay and an objector agree on certain amendments to the statement.

Greate Bay and Las Vegas Sands Inc., the lone objector to the disclosure statement, will submit language to the disclosure statement detailing Las Vegas Sands' position that the proposed reorganization plan is unconfirmable. Las Vegas Sands has asserted a $2 million claim. An official familiar with the deal said the Las Vegas company wants to be paid for Greate Bay's use of the Sands name at an Atlantic City casino.

Greate Bay doesn't think the claim is valid.

Las Vegas Sands owns the Venetian casino resort in Las Vegas.

Once the language is added, Greate Bay will submit the revised disclosure statement to Walsh. If Walsh approves the statement, a confirmation hearing is scheduled on May 2. All votes and objections must be submitted by April 22.

Prior to Wednesday's hearing, Greate Bay made several amendments to the disclosure statement and plan to resolve other objections filed by Las Vegas Sands. The major amendment provides that Greate Bay will reserve $3 million to cover Las Vegas Sands' asserted claim, if the claim is deemed valid.

Under terms of the reorganization plan, Greate Bay affiliates PPI Corp., PCPI Funding Corp. and PPI Funding Corp. will be merged into Greate Bay. Common stock in PPI, PCPI Funding and PPI Funding will be canceled.

The plan contemplates paying Hollywood Casino Corp. (HWD) and that firm's HWCC-Holdings Inc. wholly owned unit's $49.2 million claim in full. Greate Bay reached an agreement with Hollywood Casino on a plan to resolve $63.5 million of debt Greate Bay owes Hollywood Casino. In a press release Dec. 20, 2001, Greate Bay said the plan included the sale of its primary asset, Advanced Casino Systems.

Greate Bay projects unsecured claims will be paid in full. To date, the company hasn't estimated the amount of unsecured claims. All claims must be asserted by March 15.

All stock in Greate Bay will be canceled and equity holders won't receive any distribution under the proposed plan.

Greate Bay listed assets of $416,499 and liabilities of $152.1 million when it filed for bankruptcy on Dec. 28, 2001.