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November 29, 2009

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Black Gaming moves closer to bankruptcy

By Liz Benston (contact)

Friday, Feb. 20, 2009 | 6:26 p.m.

The company that owns the Oasis, CasaBlanca and Virgin River casinos in Mesquite moved one step closer to bankruptcy this week when it failed to make a $5.6 million interest payment before a 30-day grace period expired Feb. 15.

Black Gaming previously defaulted on a bank loan from Wells Fargo Foothill when cash flow fell below lender requirements. An agreement giving Black Gaming more time to boost cash flow before the bank can collect on $14.9 million in debt expires March 2. But that agreement is now in default because the casino operator failed to reach a similar agreement with bondholders by Feb. 17.

That default allows Wells Fargo Foothill to collect on the debt and could trigger collections by other lender groups.

Owner Randy Black Sr. said he is discussing a reorganization plan his debt holders.

Bond rating agency Moody's Investors Service today lowered Black Gaming's probability of default rating in recognition of the missed payment, saying bankruptcy was likely.

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