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Thursday, Nov. 12, 2009 | 6:34 p.m.
Sun Archives
- Lenders with mortgage want to give Station more time to plan reorganization (11-12-2009)
- Creditors press for independent examiner in Station bankruptcy (11-11-2009)
- Boyd advances effort to acquire Station Casinos assets (11-1-2009)
- Boyd Gaming sees profit fall as locals market takes hit (10-27-2009)
- Station Casinos wants more time to restructure finances (10-16-2009)
- Judge grants request of Station Casinos creditors to probe 2007 deal (9-30-2009)
- Station Casinos opposes creditors’ request to probe 2007 deal (9-29-2009)
- Station Casinos wants ‘breathing room’ from employee wage suit (9-28-2009)
- Station Casinos details lease arrangement, rejection of Boyd (9-26-2009)
- Study: Move to take Station Casinos private was fair (9-23-2009)
- Winners begin to emerge in fight for Station assets (9-11-2009)
- Lenders want study on Station's rejection of Boyd, other issues (9-2-2009)
- Judge delays key part in Station bankruptcy case (9-1-2009)
- Creditors probe deal that took Station private (8-27-2009)
- Station’s legal battle heats up in bankruptcy case (8-24-2009)
Station Casinos Inc. of Las Vegas is asking its bankruptcy judge to reject efforts by competitor Boyd Gaming Corp. that Boyd have a look at Station's detailed financial information.
On Nov. 1, Boyd filed court papers supporting a motion by a minority group of lenders that an examiner be appointed to study Station's finances.
Boyd also said Station's request for a four-month extension to exclusively file a plan of reorganization should be conditioned on Station providing potential casino buyers detailed property-by-property financial numbers.
Station responded Thursday, with attorneys for the Las Vegas locals gaming leader charging that Boyd is trying to manipulate the bankruptcy process in order to gain a competitive advantage.
At the same time, they suggested, Boyd is creating problems for Station by causing employees and customers to wonder whether Boyd will be taking over some of the Station properties.
Station has repeatedly shown no interest in entertaining Boyd's offer to buy some or all of Station's assets — an offer subject to a due-diligence study of Station's books. But Boyd is continuing to pursue the issue in the bankruptcy case.
"Apparently frustrated by its unsuccessful attempt to pick off and dismantle its chief competitor’s assets prior to the commencement of these (bankruptcy) cases, Boyd is now interjecting itself into these proceedings in a calculated effort to manipulate the bankruptcy process so that Station Casinos and other parties in interest are denied a fair opportunity to reorganize and continue profitable operations," Station said in Thursday's filing.
The backdrop of the situation, the Station attorneys said, is that "competition has become even more cutthroat in the current bleak economic environment, particularly in the Las Vegas locals casino market where all market participants are struggling with sharply reduced revenues."
"Boyd’s motion should be seen for what it is — an attempt to gain information which will put it at a competitive advantage, while at the same time seeking to raise doubt in the minds of Station Casinos' team members and guests as to the ultimate outcome of the bankruptcy process in order to disrupt Station Casinos' business, on which it will try to capitalize," the filing said.
Station questioned whether Boyd even has standing to intervene, as Boyd hasn't filed a claim as a creditor. Boyd has said it has obtained some Station debt, but won't say how much.
Station attorneys also said it's premature to be talking about a sale of its hotel-casino assets. Station has 18 casino properties in the Las Vegas area and its biggest competitor is Boyd with its Sam's Town, Gold Coast, Orleans and Suncoast properties.
"No one engaged in the negotiations regarding reorganization is advocating an auction-type sale of assets or of the debtors; plan negotiations have not yet run their course. Until the plan negotiation process fails, it is premature to pursue any sale process,'' Station said. "If the plan negotiations ultimately fail, other alternatives will, at that time, come under review.
"The key parties in interest in the cases will have an opportunity to consider alternative courses of action. But the process should not be driven by considerations that benefit the debtors’ competitors or would-be bidders. Boyd should not be allowed to hijack this process to advance its own interests," Station said.
Boyd offered this response Thursday to Station's filing: "Obviously, we disagree with the position Station has taken in its reply. Station had previously characterized Boyd as not being serious in our interest in buying Station’s assets. One purpose of our motion was to correct this mischaracterization and to make our serious interest in acquiring these assets crystal clear. The bankruptcy court will determine how these issues are resolved and we look forward to participating in that process.''
Station was taken private by members of the founding Fertitta family and Colony Capital of Los Angeles in 2007. It filed for bankruptcy protection in July after the recession reduced revenue at its hotel-casinos and it was unable to service its $6.49 billion in debt.
Station has been resisting a request by the minority lenders and Boyd that an examiner look into the 2007 deal. Some creditors charge that deal is now short-changing them while benefiting other lenders.
The requests for appointment of an examiner and Station's request for more time to exclusively file a plan of reorganization are due to be heard during a Nov. 20 hearing.
Ruining the morale of employees. I think most employees would rather work for a company who is financially stable, such as body, then for a company in bankruptcy, like Stations. So, it might increase morale by being purchased by Boyd.
Since Boyd has missed a couple of payments as well, why wouldnt the BK judge ask for a recap of Boyds fiances as well to make sure they dont BK with debt in 2 years?
Based on 2 visits to Sunset Station the other day, retiredyoungster is spot on. If the sports book and bar were any indication, people have abandoned Stations like the onset of the Swine flu. Even Chinese junk can't pull the people in anymore. Hope Colony Capital and the Fertittas take it in the shorts. Sadly, they have already milked the Golden Goose, and are running off with their tribute. We are the fools-stay away from any Stations, they are now out to milk you...
The Strip properties are likely to return to some profitability ahead of those in the "locals market" where Boyd and Station are primary players and current operating losses are substantial.
I can't imagine that anyone would want to expand their operations in that market especially if you were the owners of the stalled Echelon Place project. Boyd sacrificed two operating casinos , Barbary Coast ( traded ) and Stardust ( imploded ) to invest millions in Echelon where prolonged economic conditions and financial markets could prevent Echelon from ever becoming reality.
Station Casinos should be allowed the full bankruptcy processes afforded to them without interference from Boyd.
I predict that the judge will agree.
Boycott Stations until Boyd takes them over.
When Stations entered into Chapter 11 BK they lost the right to dictate the direction of the reorganization. Not having a plan ready in the first 4 months (when Stations had the right to present a plan for vote without competition from anyone else)was foolish, especially knowing Boyd was lurking as a competitve bidder for the new ownership entity....there is no doubt that the Judge will open the books to Boyd, or any other creditor who has expressed an interest in submitting a bid because the Judge is REQUIRED to do so under BK law...the only way that Stations will keep their company is to have more cash (than Boyd) injected into a newly formed entity (which will ultimately benefit from the greatly reduced debt load)..I strongly suggest that Fertitta/Barrack submitt a plan of reorganization after they see Boyd's plan and trump their cash injection to get the plan approved by the Judge.
It's sad that these folks have all become masters of making tons of money for their own family bank accounts by putting their companies into irretrievable debt.