Hollywood Casino Shreveport forced to file for bankruptcy

Tuesday, Sept. 14, 2004 | 9:19 a.m.

BLOOMBERG NEWS

Hollywood Casino Shreveport, which operates a riverboat casino on the Red River in Louisiana, said creditors forced the company into bankruptcy protection.

A noteholder who unsuccessfully tried to buy the closely held Hollywood Casino Shreveport and two construction contractors who have sued the company filed the petition to force the bankruptcy, said HCS I Inc., which owns 99 percent of Hollywood Casino Shreveport.

Hollywood Casino Shreveport had planned to file its own bankruptcy voluntarily later this year. The company wants to sell its assets to Eldorado Resorts LLC while under bankruptcy protection for about $160 million, HCS I president John Hull said in an interview.

Creditors can force a company that doesn't pay debts into bankruptcy. U.S. bankruptcy law requires at least three creditors file the petition. Hollywood Casino Shreveport has missed interest payments on its bond debt, accruing $36 million of interest, Hull said.

"I don't think this will substantially change our plans," Hull said. "We want to pursue the agreement with Eldorado." He said the company has been working with a majority of its noteholders over the past year to reach a deal.

Court papers filed in Shreveport on Friday list the creditors who filed the case as Wilhite Electric Co., Broadmoor/Roy Anderson Corp., and BDCM Opportunity Fund LP, and Black Diamond CLO 2000-1 Ltd. The creditors listed claims totaling $35 million in court papers.

Last year, Hollywood Casino Shreveport's debt holders didn't consent to waivers requested by Penn National Gaming Inc. to buy the property's notes under a change of ownership provision. Penn National said at the time it wouldn't provide financial support to the casino, which had $190 million in outstanding debt. Penn National paid $673 million for Hollywood Casino Corp.