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Thursday, April 22, 2010 | 10:30 a.m.
Sun Archives
- Union-backed group critical of Station reorganization plan (4-21-2010)
- Creditors attack Station Casinos bankruptcy plan (4-21-2010)
- Key lenders agree to Station Casinos reorganization plan (4-19-2010)
- Station Casinos asks judge for extension in bankruptcy case (4-8-2010)
- Station Casinos reports revenue drop in fourth quarter (3-31-2010)
- Station Casinos reorganization plan: Sell several properties (2-25-2010)
- Station Casinos reaches deal with key lenders, hopes to emerge from bankruptcy (2-25-2010)
- Bankruptcy judge urges Station Casinos, creditors to negotiate (1-25-2010)
- Fertittas seek to block creditors’ lawsuit in Station bankruptcy case (1-12-2010)
- Station Casinos bondholders want permission to sue (12-29-2009)
- Culinary Union sides with Station Casino’s creditors (11-23-2009)
- Culinary Union statement critical of Station Casinos (11-19-2009)
- Creditors want to expand probe of Station Casinos deal (11-19-2009)
Boyd Gaming Corp. and certain creditors filed new objections Wednesday to Station Casinos Inc.'s bankruptcy reorganization plan as legal wrangling intensified over the future of the company with 18 Southern Nevada gaming properties.
Station owners the Fertitta family of Las Vegas and investment company Colony Capital of Los Angeles have proposed that they maintain an ownership stake in the hotels and casinos through a complicated process in which lenders would foreclose on some of the properties and the Fertittas and Colony would bid for the others during a bankruptcy auction.
Attorneys for Boyd, which has been trying to buy Station, said in their objection that the Fertittas and Colony Capital have proposed an auction process that is rigged to favor the current owners.
Boyd complained specifically that the Fertittas and Colony are proposing that significant assets such as information technology systems, intellectual property and customer databases be transferred to a "PropCo" company that would control Red Rock Resort, Sunset Station, Boulder Station, Palace Station, the Wild Wild West and land at Cactus Avenue and Las Vegas Boulevard.
The PropCo properties would not be part of the proposed auction. Rather, they would be acquired by the Fertittas, Colony Capital and lenders under a process in which the lenders would foreclose on Red Rock and the Sunset, Boulder and Palace properties.
The assets to be transferred to PropCo are integral to the operation of the 13 OpCo gaming properties that are to be auctioned, Boyd said. The OpCo side of Station Casinos includes extensive land holdings, Indian gaming contracts and joint ventures with the Greenspun family, owner of the Las Vegas Sun.
"This would leave OpCo as a 'shell' of its former self," Boyd's filing said. "Interested bidders will not be bidding on a fully-operatonal OpCo, but on only a skeleton of OpCo that will require a potential acquirer to rebuild the OpCo infrastructure in order to allow OpCo to function properly."
Boyd said it can cost up to $20 million per property to development casino management systems and that transferring such OpCo systems to PropCo would result in a significant windfall to PropCo and chill bidding for the OpCo properties.
"By excluding OpCo assets of significant value, as well as the PropCo assets, from the proposed Station Casinos sale, the debtors are not allowing their assets to be shopped as their fiduciary duty requires," Boyd charged in court papers.
Boyd also noted that its offers to purchase Station assets in February and December 2009 were not accepted. The last offer for the entire company was for $2.45 billion.
"We now know that the debtors were only interested in pursuing an insider transaction at the expense of their creditors' interests in breach of the board's fiduciary obligations," Boyd's filing said. "The court should not sanction the debtors' ongoing blatant disregard for the creditors' interests by approving these one-sided bidding procedures."
Similar objections were filed Wednesday by the case's Official Committee of Unsecured Creditors, representing bondholders and others owed some $2.5 billion. The unsecured creditors charged that the Fertittas and Colony Capital have arranged to acquire a 50 percent interest in the PropCo properties at a 15 percent discount while arranging a lucrative 25-year management deal for those properties.
"These series of transactions are structured, using New PropCo and Fertitta Gaming, to camouflage the conflicts of interest and self dealing that are at the heart of the ... plan," attorneys for the unsecured creditors charged.
"The proposed restructuring is simply a deliberate campaign by those controlling Station Casinos to benefit themselves, its equity owners, at the expense of Station Casinos' creditor constituents," the creditors charged.
Another objection was filed by a group of independent lenders, which also complained that assets crucial to the operation of the OpCo casinos would not be included in the OpCo auction.
"From the perspective of the OpCo creditors, the process makes no sense: It's like selling KFC without the Colonel's secret recipe, or selling Coke without the formula, because the seller fails to capture the full value of the enterprise and the buyer acquires a business crippled without its competitive advantage," the lenders charged.
A May 4 hearing is planned in Bankruptcy Court in Reno on whether Station can proceed with its reorganization plans, and a spirited legal debate is likely because of the huge stakes involved.
Station's owners and creditors alike stand to lose billions of dollars as Station's proposals have valued the company at about $2.572 billion, while its debts and liabilities were last reported at $6.6 billion.
Station has not yet responded to the objections. Chairman and Chief Executive Frank Fertitta III this week said the reorganization plans, which are supported by holders of some 90 percent of the company's secured debt, are aimed at " maximizing the value of all of the Station Casinos’ properties for the benefit of our team members, guests, lenders and the Las Vegas community.”
It's nice to own a Ferrari. But it's not so nice if it's financed and you can't even pay the monthly rates. That's more or less what's going on with Station Casinos. The Fertittas don't want to let go but are technically unable to run the casinos on a profitable basis. Too big, and too many debts. That's the sitation. Give Boyd the control and at least financing will be guaranteed.
Let's see 1 billion plus Fontainebleau for $135 million, Revel in AC $135 for $23 million? I think the bottom dropped out of the market. Stations? Some of their properties are worthless.. time to imploded
We also need a cap on growth.
Plus completion Bonds to assure properties are built or they have to be torn down.
No place for "Common Sense" here mred and BorisR.
Where does the SUN stand on the bankruptcy as they are partners with Stations?
This is like a divorce litigation; the only winners are Lawyers.
Boyd Gaming has enough to deal with fixing the destruction of the north strip area. They have no business getting financially obligated to the Station mess. The gaming control board should require them to fix the old Stardust property before they commit their investment and operating capital elsewhere.
mred, you forgot to blame conservative talk radio. Are you feeling okay today buddy?
This whole BK has been one big self-deal and leaves creditors out to dry. Like I said in the past. Chapter 11 Bankruptcy...Trump style! The art of the steal.
The "stay home and eat beans and rice" Dave Ramsey Show was responsible for the decline in locals casinos. (Thanks for reminding me dex.)
I hope the new manager out there at that radio station gets rid of that show. How about a dinning and entertainment radio show? Instead of a "Tennessee Tightwad Show"
Your right Boyd littered the North Strip with their Junkyard. This should be outlawed.
No. The Fertitta's are actually WAAAYYYY ahead on this deal. At the tippy top of the market, they sold their holding of the company back to the company itself at a huge profit. They then left themselves in a position of running the company without owning it. Now the company is bankrupt, they want to buy it back for pennies on the dollar. Great for them, sucks to be the idiots who loaned the company the money to buy them out.
"It's nice to own a Ferrari. But it's not so nice if it's financed and you can't even pay the monthly rates. That's more or less what's going on with Station Casinos. The Fertittas don't want to let go but are technically unable to run the casinos on a profitable basis. Too big, and too many debts. That's the sitation. Give Boyd the control and at least financing will be guaranteed"
Hey Ferttitas
You can screw some of the people some of the time
but
You can't screw all of the people all of the time.
BOYCOTT STATIONS
The debtors themselves valued the company at $2.573 billion.
Boyd bid 2.45 billion.
Boyd's offering 95% of what the debtors say the company is actually worth.
This may be the 'easiest' complex chapter 11 case I've ever seen: the court should order all the assets be sold together at a 363 sale and qualify Boyd's 2.45 billion dollar bid, presuming it still stands, as the 'stalking horse' bid.
If the other interested parties want to up their offer for the entire group of assets to above 95% of FMV, the 363 process would allow them to bid as well.
You all dont know what you are talking about. The comments section always makes me laugh when you read comments from people totally not in the know. Right or wrong.
But hey, the best thing about America is you get the freedom to speak. Thank goodness for that. Doesnt mean the comments are accurate but you are entitled to your opinions none the less.
FYI- for all the talk of Boyd coming in. Have you ever walked into the Cal Hotel downtown without having to wear a rubber bodyglove to keep the filth off of you?? Their hotels are absolutely filthy! Could you imagine them trying to keep Red Rock clean? They wouldnt have the first idea on how to do it. Trash cans, mops, sponge...what are those things?
Enjoy the day
By hotel101 is probably a member of Stations management, afraid for his job should Stations be sold.
I agree with newyorkrebel. Boyds bid $ 2.45 BIL for Stations . Let other Co's increase their bids if they are interested in the CO! This has been going on to long. I doubt Boyd's bid was was valid.
What a bunch of horse S***! This deal is structured only to benefit the Fertitta family. The Fertitta family could care less about anyone but themselves. They screwed everyone in the business dealings.
hotel101 :
Get in line buddy, your just another " higher than thou " poster who jumps into these discussion pages from time to time claiming to be all know all. Do us all a favor and comment if you have something constructive to say, otherwise spare us..
I was at Green Valley Ranch (GVR) the other day last month and it wasn't like it was in the years before. You can feel that something's just wrong. Not enough players, obviously a sign that many Vegas citizen are unhappy about the way this company is run. I didn't enjoy my visit although I won money. There are better places to gamble and I really hope that there will be a new management when I bring my money next time.
From Switzerland
Ya bring back the Klondike and Vacation Village!
Vacation Village would have been a good acquisition for Stations. It would have complimented the other toilets that Stations owns.
The Wild Wild West Casino, apparently also owned by Station Casinos, is the main toilet. I think they bought it with the idea to create something like "Tropicana Station" or the like in the later phase. Unfortunately it turned out that they ran out of money and creditors are hard to find these days... So the only chance is to keep the main toilet and keep it open for the truck drivers.