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Sun File Photo
The entrance of Sunset Station as the sun goes down in Henderson.
Thursday, July 30, 2009 | 12:41 p.m.
Related Documents (.pdf)
Sun Archives
- Station Casinos wants out of lease for office space (7-29-2009)
- Station Casinos files for Chapter 11 (7-28-2009)
- Bondholder drops lawsuit against Station Casinos (5-11-2009)
- Station Casinos: Bankruptcy date depends on bondholders (3-18-2009)
- Betting it all on bankruptcy? (2-17-2009)
- Hearing delayed again on Station Casinos site (2-16-2009)
- Boyd responds to Station’s rejection of buyout (3-9-2009)
- Station rejects Boyd’s offer, extends debt deadline (3-3-2009)
- Boyd makes play for Station Properties (2-24-2009)
- Boyd Gaming offers to buy Station (2-23-2009)
- Station responds to lawsuit, misses $15.5M payment (2-17-2009)
The bankruptcy of Station Casinos Inc. has revealed that the Las Vegas company's banks are fighting amongst themselves as different groups of lenders move to protect their positions in the company's $6.4 billion of debt.
In advance of a hearing today in Reno on Station's initial plans to use cash during the bankruptcy process, a group of 12 lenders filed an objection.
They are Bank of Hawaii, Bank of Nevada, BNP Paribas, First Tennessee Bank, General Electric Capital Corp., Genesis CLO, Natixis, Castlerigg Master Investments Ltd., Trust Company of the West, the Bank of Nova Scotia, Union Bank and U.S. Bank. Those banks say they hold nearly 30 percent of Station's senior secured debt.
The banks, called the "Independent Lenders,'' charge that for more than six months they have tried to engage Station, Deutsche Bank as administrative agent and a lenders' "Steering Committee'' regarding potential restructuring plans for Station.
"The Independent Lenders have been rebuffed in all respects and have been excluded from any meaningful participation in the development of a mutually acceptable proposed capital structure,'' those lenders charged in court papers today.
They complained that while Deutsche Bank and its advisers claimed to be acting in behalf of all secured lenders in the restructuring talks, Deutsche Bank and the debtors repeatedly rebuffed the Independent Lenders' request for due diligence and other basic information.
The Independent Lenders say Deutsche Bank has interests in three credit facilities at issue in the bankruptcy and that its interests conflict with those of the Independent Lenders.
"Throughout this entire process, Deutsche Bank improperly has used its position as the Administrative Agent to block other lenders and to engage in suspect negotiations and schemes, in order to manipulate the capital restructuring to its advantage and to the disadvantage of other senior lenders,'' the Independent Lenders charged in a court filing presented by their attorneys with the Chicago law firm of Paul, Hastings, Janofsky & Walker; and the Reno law firm of Downey Brand.
Station and Deutsche Bank have not yet responded to the Independent Lenders' filing. A Station spokeswoman had no immediate comment.
The Independent Lenders complain specifically that:
--Station proposes to transfer tens of millions of dollars to non-debtor affiliates, including to an entity to pay interest on property loans.
--Proposed budget items are "grossly inappropriate and unexplained'' including more than $31 million for professional fees over 13 weeks, $30 million for "Native Gaming Deals'' and $22 million in capital expenditures over 13 weeks.
--Station and Deutsche Bank have "engaged in suspect negotiations and transactions that warrant close scrutiny.'' These include an offer by Deutsche Bank to select lenders to make a one-time payment to them in exchange for support of a reorganization plan that the independents say heavily favored Deutsche Bank and other key property lenders. They also include a $257 million draw by Station on a credit facility on Dec. 19, 2008. The lenders say Deutsche Bank didn't object to this draw and that Station drew the money on the eve of defaulting on a lending covenant; and that Station knew about the impending default and didn't disclose it.
"The court should call for a full vetting and justification of the debtors' various early-case, extraordinary requests for relief -- a process simply not possible on the schedule sought by the debtors,'' the Independent Lenders concluded.
Station and certain affiliates filed for Chapter 11 bankruptcy protection Tuesday after months of talks with lenders didn't produce an agreement on a plan for restructuring its debt.
Because of the recession, Station's revenue and cash flow have fallen and it has had difficulty making its debt payments.
The banks need to form a coalition to remove the Fertittas and possibly Colony...and probably upper management.
Only when these parasites are removed can the company move forward.
The Fertittas are very shrewd . If they are really sincere they can put some of their money from money machine UFC. Don't hold your breath. Some of the properties should be sold ( RED ROCK, GREEN VALLEY, Alliant)
Since the Fertittas announced they will put up TWO HUNDRED FIFTY MILLION DOLLARS of their own money to help buy down the debts when it comes out of BK I guess they are being sincere.
The UFC is a separate company, you don't rob one to save the other, not good business.
The Fertittas built this company into what it is so they deserve the chance to fix the problems.
I don't think anyone here would want to see it crash and burn, they employee 13,000 locals.
Bring on BOYD!!!!
Got a letter from Frank today about how much he appreciates my business (bet he does).
Went to the website and contacted "corporate" as he requested.
Told him to cancel my BP account and keep the points.
Beat me, punch me, kick me, eventually you can't take anymore.
Boycott Stations
Fertittas or someone else, business is business, especially in Vegas. And the reality is that there are too many locals casinos now that there are fewer locals with steady incomes. The Strip felt it first with fewer tourists, started cutting back on employees, and now the locals casinos are feeling it. It'll only stabilize when supply syncs up with demand (fewer casinos or more tourists).
Somebody should put these Independent Lenders' comments about Deutsche Bank on a bronze tablet, and prominently display it on Wall Street. The comments reflect the reputation Deutsche Bank has had on the street for years, among bankers trying to cooperate with Deutsche Bank's employees and among Deutsche Bank's borrowers.
Deutsche Bank stayed out of the U.S. banking business until about 10 years ago, when they bought a very small bank and trust company so they could actually make loans to consumers in the U.S.A. During "the housing boom" in Las Vegas, they were churning out high risk home loans (e.g. 5-10% down on an $800,000 house) which they were putting into mortgage backed securities (MBS) to be sold to hedge funds, pension funds and insurance companies, and reaping huge fees with little retained risk. On the list of lenders who artificially inflated and thereby destroyed the Las Vegas housing market, Deutsche Bank is way up there, at the top of the list of irresponsible lenders, along with the infamous Countrywide.
At this point, it will be hard to predict whether Deutsche Bank's machinations will help or hurt the current Station Casinos' employees in retaining their jobs. If you talk to people who know Deutsche Bank's corporate attitude, the general conclusion is that "I wouldn't want to work for them as a low level employee". As a result, the Fertitta management of the Stations may turn out to be the "golden era" which the casinos employees look back at, with fondness, if Deutsche Bank obtains control of management of the company through a Chapter 11 Plan.
If you read about Deutsche Bank on Wikipedia, and on the sources cited by Wikipedia, you'll see it is commonly acknowledged that Deutsche Bank was the banker to the Third Reich; that its manager level bankers survived the Allied control of Germany post war; and that those WWII era bankers' attitudes towards the rest of the world were taught and re-taught in Deutsche Bank's corporate ethos, and persist today.
So you take a company private by borrowing the money and then down the road you go bankrupt so the borrowers lose their money. Very shrewd, but immoral.
How can anyone reasonably expected gamblers to patronize a bankrupted parlor?
it's a classic case of spending money you don't have. It works the same for your checking account as it does for big businesses. Part of the problem is commissioned-based corporate lending. All the loan officers wanted was for Fertitta to sign on the dotted line, so they could pocket their commissions. They really didn't care if the load was made good or not. Wow, uncannily similar to another problem we have in real estate, isn't it?
oh....and the Fertitta's are really, really nice people. They got sweet-talked and suckered by the pirates of high finance. It's a tragedy.
oh....and the Fertitta's are really, really nice people. They got sweet-talked and suckered by the pirates of high finance. It's a tragedy.
Sorry, you are right that someone got "sweet-talked and suckered" those were the bondholders and lenders mentioned in this article!
Read the lyrics to Depeche Mode "Everything Counts" they were all in on it! Fertittas made how many hundreds of millions on the privitazation deal? All the guys whackin' the mula up in the back room to get the deal greased thru...It all would have worked with a clean getaway if the local casino market didn't implode...Well, Ask Mozilla of Countrywide what he thought were the odds of a sub-prime implosion!
Everything Counts Lyrics
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Everything Counts Lyrics
Artist(Band):Depeche Mode
The handshake
Seals the contract
From the contract
There's no turning back
The turning point
Of a career
In Korea, being insincere
The holiday
Was fun packed
The contract
Still intact
The grabbing hands
Grab all they can
All for themselves
After all
It's a competitive world
Everything counts in large amounts
The graph
On the wall
Tells the story
Of it all
Picture it now
See just how
The lies and deceit
Gained a little more power
Confidence
Taken in
By a sun tan
And a grin
The grabbing hands
Grab all they can
All for themselves
After all
It's a competitive world
Everything counts in large amounts
The grabbing hands
Grab all they can
Everything counts in large amounts