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Thursday, Aug. 5, 2010 | 9:36 a.m.
Sun archives
- Station Casinos, bondholders settle dispute (7-28-2010)
- Station Casinos bondholders renew interest in suing over deal (7-9-2010)
- New objections filed in Station Casinos bankruptcy case (7-2-2010)
- Station Casinos, Herbst Gaming fight bondholders in bankruptcy cases (6-17-2010)
- Station Casinos bondholders seek delay in auction process (6-9-2010)
- Judge OKs Station Casinos’ plan to sell 11 casinos (5-28-2010)
- Judge deals blow to Culinary Union effort in Station Casinos bankruptcy case (5-27-2010)
- New objections filed to Station Casinos bankruptcy plan (5-25-2010)
- Station Casinos loses $53.5 million in first quarter (5-17-2010)
- Station Casinos: No competitive advantage under bankruptcy plan (4-29-2010)
- Station Casinos: Boyd Gaming meddling in bankruptcy case (4-28-2010)
- Boyd Gaming objects to Station Casinos reorganization plan (4-22-2010)
- 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)
Bankruptcy court filings today confirmed that no one has stepped up to out-bid a group led by the Fertitta family in Friday's auction of certain Station Casinos Inc. properties.
With Boyd Gaming Corp. of Las Vegas dropping out of the bidding July 30, charging the process was rigged to favor the insiders, Station founders the Fertittas and participating lenders and investors may win the auction for the group of 11 properties with their "stalking horse" bid of $772 million -- unless Station's bankruptcy judge entertains bids for individual properties.
The properties to be auctioned are called OpCo properties and include four Las Vegas locals hotel-casinos: Two Fiestas, Santa Fe Station and Texas Station.
Lenders and the Fertittas together have arranged to spin out of the bankruptcy five more PropCo properties: Red Rock Resort, Sunset Station, Boulder Station, Palace Station and the Wild Wild West.
Bondholders who had been fighting the plan reversed course last week and now are investors with the Fertittas in PropCo and potentially OpCo.
Two more properties are not in bankruptcy and are not part of the auction: Aliante Station and Green Valley Ranch Resort. Station's partner in those hotel-casinos is the Greenspun family, owner of the Las Vegas Sun. The partners are working to restructure the debt of those properties outside of the Station bankruptcy process.
Lazard Freres & Co. LLC investment manager Daniel Aronson, who has been working with the bidders in behalf of Station Casinos, said in a court filing today that the OpCo properties were marketed to 79 parties and that 39 parties received confidentiality agreements.
Eight parties submitted letters of intent by the bidding deadline, one of which was disqualified. Other than Boyd, the bidders have not been identified.
Of the seven remaining bidders, Boyd expressed interest in bidding for all of the OpCo properties while six bidders were interested in only selected assets.
Some of the selected asset bidders apparently had talks with Boyd about submitting a combined bid for some or all of the OpCo properties, but it's unknown what came of those talks.
The bottom line, Aronson said, is that after the final bid deadline of July 30 passed, no qualified bid had been received for all of OpCo and two "non-conforming" bids were received for potential purchases of unspecified "real property."
"In light of the foregoing facts, Lazard believes that the stalking horse bid is the highest and best bid for the OpCo assets that is available to the debtors to date," Aronson's filing said.
Thru their management, the Fertittas ran the company into bankruptcy. Now this same management group is being given another 750 million to make a go of it??
Am I on Mars?...or am I missing something
You are not on Mars, you just missed the landing there. You are now flying in nowhere space..... The world belongs to the greedy....and the nasty. As always.
From Switzerland
Nothing goes perfectly as planned. I'd say that the statement that the Fertittas "ran the business into bankruptcy" is less true than saying they were broadsided by unexpected economic decline. Forward vision is not always 20/20, so unless you are out there taking risks and creating something interesting using your money and hard work, then to call business owners "greedy" is ignorant.
Corruption from the start. Fertitta's should NOT be able to bid on these properties, then you'll see the true value.
Thru their management, the Fertittas ran the company into bankruptcy. Now this same management group is being given another 750 million to make a go of it??
Am I on Mars?...or am I missing something
No Tom you're not. But one of the reasons they took the company private was due to the unbelievably complex regulatory structure imposed upon corporations by the passing of the Sarbanes-Oxley legislation. With the coming of that regulatory framework the costs of compliance with the bookkeeping aspects of the Act actually made it attractive to NOT be a publicly held corporation. So Tom you can partly blame the intrusion of government into the mix with arcane regulatory structures to "curb the excesses of companies like Enron and Tyco. (which have really done great--NOT). How's that hopey changey thing working for ya now?
Sorry...should be a close of the quotes after Tyco."
Why are the owner of the Sun partners with this group? Profits over what?
bbt, not sure why you included your "hopey changey" comment (other than to be gratuitous) - as the SOX legislation you refer to was enacted under the Bush administration.
Steve - This story is really missing some elements here.
First off, what is the current relationship between the Fertitta family and Station Casinos? It's my understanding they sold their stake in the company awhile back (but my memory is foggy).. now they're trying to buy it back broke? If that's the case, don't they stand to profit substantially from essentially dumping a money losing company -- that their management set up to lose money -- and then buying it back?
Given that the Fertitta name is inexorably tied to the Station Casinos brand, it's important to explain the history -- in terms the layman can understand.
And what's up with OpCo and PropCo? There is a difference between the two?
The Greenspun Family owns the land the GVR and Aliante sit on, IIRC. That's why they're partners.
And the idea that SOX is awful and is pushing companies to be private is ridiculous right wing fear-mongering. I don't see Exxon, Apple or Microsoft (the three biggest US companies) crying about it.
SOX is named after former Senator Paul Sarbanes, a liberal Democrat from Maryland who sponsored the bill. Bush signed the bill. If you recall, Bush did not veto a single bill until late in his second term. He mistakenly tried to be bi-partisan with Dems who wanted to destroy him. (The Dems plan worked as they took back Congress in Nov 2006 and since that happened, unemployment went from 5% under the Repubs to 10% under Reid and the Dems.) I dislike both parties but facts are facts and SOX has been bad for the overall economy.
Bring the rain
If I'm not mistaken the Fertittas held 25% of the "privately owned" stations casinos...They made a fortune selling the other 75% to Colony Capital ( I think) when it went private...so they already hit the "cashout" button...so when the economy tanked and the NEW private Station Company couldnt meet their debt load, they filed BK ...now are buying back their own properties for pennies on the dollar...can you say Donald Trump?
LasVegas2009: 14.5% unemployment---5% under Bush---Need I say more. Oh and by the way the Iraq war was backed by not only Repubs but Dems. And if you don't think they had WMD's why don't you talk to the people in Kuwait. Get your history straight.
"SOX is named after former Senator Paul Sarbanes, a liberal Democrat from Maryland who sponsored the bill."
It's also named for Rep. Michael Oxley, a Republican from Ohio. It passed the House 423 to 3 and the Senate 99 to 0. It is You make it sound like Democrats rammed it down Bush's throat.
There is something fishy about the Fertitta's bidding on the same properties they bankrupted in the first place.
express445-you are sooo correct-this has to get a whole lot better to be only fishy - I wonder what regulatory group should be CLOSELY scrutinizing this-
I may be in the minority but the Fertitas are being rewarded for a co that went to bankruptcy. They are getting back their properties for a small amount. If u wanted to be fair u could have an independent co evaluate the co and come up with a figure that would be fair. Only then would u have qualified co's bidding. Stations will struggle for years and I would not be surprised if they filed bankruptcy again.
Anyone care to wager as to when Stations might do another public offering so that Deutsche Bank can get their investment back and allow the Fertittas to start the scam all over again?
this was the plan right from the start. feel bad for nice workers we've met at sunset station while we stayed there for years, but no more. hey bore, boris has more insight from abroad than you local yokel.
Am I the only one who doesn't understand any of this? It would be nice if the Sun author would take the time to put this all in terms that the lay-person could comprehend. Or perhaps the author himself doesn't even understand what he is writing? What it seems like to me is that this company went bankrupt, then they had to auction off the properties, and then they won the auction to get back their own properties. How does this make sense????
bbtbrain --
Nice to have someone here who actually gets it. No good deed goes unpunished ;)
There is a fine line between moral hazard and perverse incentive, and this story covers the full spectrum. SARBOX, unchecked derivatives trading, legal recourse for gambling wagers, no method to check for solvency, tax incentives, tell me when to stop ...
Does this sound like a free market gone awry, or a regulated market gone awry?
No wonder things are so bad with people insulting european tourists, I guess European is part of Sharon Angle's "anti-Christ" list...
Wow is this a big game of monopoly on Station Casinos with the Fertitas holding the most hotel motel properties... WTF.. How do you bid on something that you went into bankruptcy for in the first place.... Only if everyone else had that kind of gift or as you say stimulus package from somewhere.... So all the money owed is what ,, forgiven so they can regroup and do it again 10 years later... How much taxpayer money is used for this "we got them by the balls money scheme" costing...What a joke they make of the laws....
Maybe now Frank and Lorenzo will put some HIGH HAND JACKPOTS in at Red Rock's Poker Room, they need it.
Pacman 720 is absolutely right! The Art of the Steal. They played this beautifully right from Donald Trump's play book!