Hollywood Casino Shreveport agrees to bankruptcy

Rosland Briggs Gammon

Wednesday, Nov. 3, 2004 | 9:29 a.m.

Hollywood Casino Shreveport, a riverboat casino operator whose creditors forced it into bankruptcy in September, agreed to reorganize and sell its assets under court protection.

Hollywood Casino Shreveport agreed to sell its assets to Eldorado Resorts LLC. The deal is contingent upon court approval of its reorganization plan.

"We had always planned to file a voluntary" bankruptcy petition, said John Hull, president of Hollywood Casino Shreveport owner HCS I Inc. "In effect we're in the same place." HCS I, which owns 99 percent of Hollywood Casino Shreveport, 1 percent owner HCS II Inc., and their parent HWCC-Louisiana Inc. sought bankruptcy protection Oct. 30 along with Shreveport Capital Corp., a unit of Hollywood Casino Shreveport.

Black Diamond CLO 2000-1 Ltd., a noteholder that unsuccessfully tried to buy Hollywood Casino Shreveport, and two construction contractors who sued the company filed the petition to force the company into bankruptcy. Black Diamond and another creditor won a request have an examiner appointed to review previous offers and decide if another bidding process is needed.

Hollywood Casino Shreveport, which opened on the Red River in Louisiana in 2000, began seeking a buyer in February, according to court papers. It defaulted on its bonds in 2003 and has accrued $36.9 million of interest on missed bond debt payments.

Under a plan proposed by Hollywood Casino Shreveport, Eldorado would get a 75 percent equity stake in the reorganized company. Holders of its $189 million in notes would get $140 million in new notes in the reorganized company, according to court papers. They also would receive $20 million in preferred securities and a 25 percent non-voting equity stake.

Other creditors that filed to force the company into bankruptcy were Wilhite Electric Co., Broadmoor/Roy Anderson Corp. and BDCM Opportunity Fund LP, according to court papers filed in Shreveport, Louisiana. The creditors listed claims totaling $35 million.

Last year, Penn National Gaming Inc. paid $673 million for Hollywood Casino Corp., parent company of Hollywood Casino Shreveport and its affiliates. Hollywood Casino Shreveport's debt holders didn't consent to waivers requested by Penn National to buy the property's notes under a change of ownership provision.