Facebook
Fark
Digg
Reddit
StumbleVegas-based Majestic Star Casino seeks bankruptcy
Monday, Nov. 23, 2009 | 8:51 a.m.
Las Vegas-based Majestic Star Casino LLC filed for bankruptcy protection today in Delaware after defaulting on debt obligations covering its properties in Colorado, Indiana and Mississippi.
Majestic Star is led by gaming executive Don Barden, who through another company controls Fitzgeralds hotel-casino in downtown Las Vegas. The Las Vegas property is not included in today's bankruptcy filings.
Majestic Star, struggling with its long-term debt load of $580 million and total liabilities of $771 million, has two riverboat casinos and a hotel in Gary, Ind.; a casino and hotel in Tunica, Miss.; and a casino in Black Hawk, Colo.
The company, which is in default on the $580 million in long-term debt obligations, filed for bankruptcy protection after talks on restructuring its debt failed to yield an agreement and certain lenders threatened to foreclose on the company's properties.
For the quarter ended June 30, Majestic Star lost $10.3 million on net revenue of $75.9 million as the recession reduced business at its properties. For the same quarter of 2008, the company lost $8.2 million on net revenue of $85.3 million.
"Debtors commenced these cases to preserve their businesses, operations and going concern value while they continue to negotiate a consensual balance sheet restructuring with their principal creditor constituencies," Jon Bennett, senior vice president and chief financial officer, said in a court filing today. "Notwithstanding challenges posed by the recent economic downturn and increased competition in the markets in which they compete, the debtors' businesses and operations continue to perform well and, excluding debt service, produce cash flow sufficient to support their ongoing operations. The debtors are confident that they will be able to reach consensus with a majority of their creditors regarding a new capital structure and debt service load that more appropriately reflect the debtors' revenues, and which will position the debtors to emerge from these cases as a financially healthy and stable organization."
Employing 2,600 people, Majestic Star's properties have 4,160 slot machines, 116 table games, 21 poker tables and 806 hotel rooms.
They are the Majestic Star and Majestic Star II casinos and the Majestic Star Hotel in Gary, Ind.; Fitzgeralds Tunica in Mississippi and Fitzgeralds Black Hawk in Colorado.
Discussion: comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
No trusted comments have been posted.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
- Coolican: Henderson officials out of loop on police brutality case, raising red flags
- Lumberjacks — ‘Where the Big Boys Eat’ — hiring for North Las Vegas location
- Berkley draws stark contrasts with Heller over immigration
- Howard Miller, prominent lawyer and ‘true Las Vegas native,’ dies at 68
- Two dead after accident in downtown Las Vegas
- Short memories may serve president
- Instant Analysis: Debating whether UNLV should continue series with San Diego State
- Superstar Whitney Houston dies at 48
- Police looking for man in white Ford Explorer
- Saying ‘No mas’ to government
Blogs
The Kats Report
Live color from the scene at Thomas & Mack Center: We have a wire job! Rebels win, and Louie Armstrong sings!
South Point owner Michael Gaughan's take on 'Vegas Stripped': 'I'll give it an 8' (4 Comments)
Author relishes writing the life story of ‘larger-than-life’ Oscar Goodman (3 Comments)
Elsewhere
Landowner: All roads could lead to Uxbridge casino
Revel reveals smoke-free casino opening
Cirque du Soleil show in Sands China casino to close this month
Meet the woman behind Sheldon Adelson
The Sun
Locally owned and independent for more than 50 years.
This is unfortunate. I certainly admire the company that Don Barden has put together; however, Majestic's properties typically serve the bottom tier of the market which is definitely getting hurt badly in this recession. Additionally, if you look at the markets where Majestic operates, they are getting killed by their competitors. They need to re-invest in their product which has aged significantly.
Their marketing strategy is where to begin. Make the visitation experience more attractive to tourists with loose slots, and give away rooms and meals. Benny Binion didn't invent this strategy because he was losing money..
Left to contemplate the latest in bankruptcy filings, I marvel at how a business that manufactures nothing can sting together so much debt. It just seems that the business model for a casino is to borrow as much as you can then file bankrupcy within ten years. There seems to be an unusual ratio of casino bankruptcies. Just another way to cheat and steal.
Kaliscanner : Particularly good point..
Boy, if thats the case, I truly have a list of debts I would love to unload...
Yes Kaliscanner. Especially when the owners walk away with the bulk of that borrowed money.