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April 17, 2014

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As earnings fall, Riviera unsure if bankruptcy can be avoided

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Steve Marcus

A view of the Riviera on the Las Vegas Strip on Dec. 26, 2007.

Riviera

A view of the Riviera on the Las Vegas Strip on Dec. 26, 2007. Launch slideshow »

The owner of the Riviera hotel-casino in Las Vegas today said it continues to work on restructuring its $281 million debt in hopes of avoiding a Chapter 11 bankruptcy restructuring.

Riviera Holdings Corp., however, said there's no assurance a bankruptcy filing can be avoided as it remains in default on loans and as it reported dismal third-quarter financial results for its 2,075-room Las Vegas property on the Strip.

The Las Vegas Riviera was pounded by the recession, with quarterly revenue falling from $30.2 million in 2008 to $22.6 million this year.

Occupancy at its Las Vegas hotel fell from 87.1 percent to 76.7 percent, while average room rates tumbled 20.8 percent to $59.51.

Riviera Holdings also owns a casino in Black Hawk, Colo., with 750 slot machines and nine table games. Revenue there was up from $10 million in 2008's third quarter to $12 million in the 2009 quarter.

Overall, Riviera Holdings in the quarter lost $4.67 million or 38 cents per share vs. a loss in the year-ago quarter of $3.46 million or 28 cents per share, as net revenue of $34.6 million was down from $40.2 million.

"We believe that due to a number of factors affecting consumers, including but not limited to a slowdown in global economies, contracting credit markets and reduced consumer spending, the outlook for the gaming and hospitality industries remains highly uncertain. Based on these adverse circumstances, we believe that the company will continue to experience lower than expected hotel occupancy rates and casino volumes," Riviera Holdings said in its quarterly financial report.

"As a result of the economic factors and the defaults on the credit facility, there is substantial doubt about our ability to continue as a going concern," the company said.

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