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Tuesday, Sept. 29, 2009 | 7:12 p.m.
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Sun Archives
- 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 swings to loss in second quarter (8-14-2009)
- Boyd still interested in acquiring Station properties (8-5-2009)
- Culinary Union sees shot in Station insolvency (8-3-2009)
- Lenders battling in Station Casinos bankruptcy case (7-30-2009)
- 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)
On the eve of a hearing in Reno in its bankruptcy case, a dispute emerged Tuesday on whether creditors can extensively investigate the 2007 deal that took Station Casinos Inc. of Las Vegas private.
The case's Official Committee of Unsecured Creditors said in a court filing that it intends to press its request Wednesday that it be allowed to hire law firm Quinn Emanuel Urquhart Oliver & Hedges LLP to fully investigate the deal.
Station, in a filing Monday, didn't object to the hiring of the firm but objected to the firm conducting a full investigation. Station noted its Board of Directors' Special Litigation Committee has already conducted a "comprehensive review" of the deal and the results were provided to the creditors.
"A complete re-creation of the Special Litigation Committee's investigation by Quinn Emanuel is unnecessary and would be waste of estate time and money," Station said in its filing.
"At most, Quinn Emanuel should be given an opportunity to vet the report, but not to re-create the investigation," Station said.
The $3 million study made public last week said that while the going-private transaction was not successful, the players in the deal could not have foreseen the recession that has sharply reduced revenue for Station and made it impossible to meets its debt obligations. The committee found the deal should be able to survive threatened legal challenges.
But the creditors committee said Tuesday: "The debtors should not attempt to intimidate the committee from undertaking its fiduciary duties owed to unsecured creditors of the debtors by seeking to curtail the committee from thoroughly investigating the going private transaction, which resulted in the debtors incurring at least an additional $1.6 billion in interest-bearing debt and resulted in hundreds of millions of dollars paid to insiders of the debtors."
The creditors noted a few issues with the report:
--Even the Special Litigation Committee concluded the deal resulted in Station Casinos and its subsidiaries not receiving "reasonably equivalent value" as measured against the transaction.
--Deutsche Bank, which was heavily involved in the deal and remains a key Station lender, declined to participate in the study.
--The creditors said the report didn't address a lease arrangement under attack in the bankruptcy case in which Station leases from itself four hotel-casinos, with much of the rental money going toward mortgage payments. Critics say the rent and mortgage deal should be reworked to reflect today's economic realities that have lowered the value of the property collateral.
--One of the Special Litigation Committee members, Dr. James Nave, may not be sufficiently "independent" to suggest that the creditors be precluded from fulfilling their fiduciary duties, the creditors said.
Separately, the acting U.S. Trustee in the case, Sara Kistler, filed an objection to Station's plan to pay several mid- and high-level executives back pay that exceeds guidelines in bankruptcy cases limiting such back-pay claims to $10,950.
The pay at issue is for work performed prior to the July 28 bankruptcy filing.
The annual salaries of 16 employees at issue range from $260,000 to $1 million, the trustee said.
The trustee said the debtors are not arguing any employee has threatened to leave and have not offered evidence that most of the employees could readily find employment elsewhere in the industry.
The trustee cited a ruling in another bankruptcy case, saying: "Fostering the morale of highly-paid employees to encourage them to work on rehabilitation of the debtors does not rise to the level required to treat insider pre-(bankruptcy) claims differently than all other pre-(bankruptcy) claims."
Station said that for paychecks issued on July 31 and Aug. 14, it withheld payment of $224,298 from 17 employees -- the amount of their combined salaries in excess of the $10,950 limit.
Of that amount, it's now seeking permission to pay $136,347 to the affected employees. Station said it's currently not seeking to pay back pay to one employee, identified as employee No. 1, who is owed $87,951 of pre-bankruptcy salary.
"The employees who did not receive their full wages on payroll dates July 31 and Aug. 14, comprise those of the debtors’ senior and mid-level managers whose bi-weekly salary exceeds $10,950. The debtors believe that these employees have been and remain a key element in the success of the debtors business operations, and their continued commitment to the debtors is a critical component of the debtors’ current restructuring efforts. Notwithstanding the overall downturn in the gaming industry, most of these employees could readily find employment elsewhere in the industry. Their commitment and morale is important to the success of these debtors and the Chapter 11 cases," Station's filing said.
"The debtors believe that making the effected employees whole for their hard work in the weeks immediately prior to the (bankruptcy) petition date, when they worked extremely long hours to prepare the debtors for these Chapter 11 cases, will foster employee goodwill, encourage more of that same dedication and hard work, and inure to the benefit of the debtors’ estates and creditors," the filing said.
But the acting U.S. Trustee asserted "the debtors have not met their burden to show that payment of these pre-petition claims, and not all others, should be paid prior to (reorganization plan confirmation."
I think all this litigation is delaying the inevitable. The way I see it Stations did not get full value when they became a private co. The co should be sold and let a reputable co or co's take over. We are wasting too much money on attorneys ans accountants. They are the only people making money.
Chazbean...
I'm truly sorry to say that You truly have no idea how a Hotel company is run. Trust me when i say, after doing it 25 years I "know more than you" and caan very politely tell you that your comments are ignorant.
You think the late, great icon Mr. Frank Fertitta Jr, Frank Fertitta III and Lorenzo Fertitta made Station Casinos what it is out of stupidity? Who are you calling "reputable"?
And finally, who is this "We" are wasting too much money?
Only ones spending money are Stations...Sure, lawyers are making money. Mostly because bond holders want more than their fair share after failing to read the contracts they signed. Now they want 100% of their money and cry over spilled milk that they cant obtain it. They sure were willing to cash those dividends when they were coming in month after month when times were good.
Again, all those vultures jumping off the band wagon here. We should compile a list so that when Vegas bounces back, and it WILL bounce back, of all those who talked poorly on Stations and the Hotel industry of Vegas. You are all the ones no one wants to hear from again.
Im sorry, but one reason Vegas cant get back on its feet is because of all the negative press compounded daily in the press and the public like yourself. If only people could speak positively about our great city! But hey, good news doesnt sell! When was the last time someone placed on the front page a huge jackpot winner?
Again, i respect your opinion. But know the facts before you speak please.
Thank you
A hard working Hotel/Casino Associate
When was the last time someone actually won a big jackpot?
it "seems" like that doesn't happen anymore.
iknowmore, casinos in vegas have left your normal visitor in the dust. drop your $100 in slot for 5 minutes and get the hell outta here. stupid dance clubs and your whales will not keep your paychecks coming. denro is right, years ago you'd see jackots all over, casinos full of slot players, and these folks built these new casinos. well not anymore. yout probably a real hard worker, just explain to your bosses what brings people in and keeps them coming back. love your passion though, more workers need that. i could never understand why you can't go to work everyday and have a good time especially in a casino. worked as crap dealer back in 70's and loved going to work everyday, self employed now and still love work, if you make work-work your in for a miserable life.
To the knowmoreaboutcasinos. Have u been in a Station casino lately ? If you are so positive why did u leave ( or were u forced out)? Stay in a casino and see how many Jackpots are won over 2-3 hours. They used to have good jackpots (VP Progressive looser slots ETC) people aren't stupid Stations overbuilt and were greedy and became private so the public couldn't monitor the co. It will take many years for the Casinos to be viable again if ever.