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StumbleStation Casinos gets approval for bankruptcy plan
Published Friday, Aug. 27, 2010 | 12:49 p.m.
Updated Friday, Aug. 27, 2010 | 1:53 p.m.
Sun archives
- Station Casinos settles with creditors over bankruptcy plan (8-19-2010)
- Station Casinos reports wider loss in second quarter (8-16-2010)
- Fertittas win Station Casinos bankruptcy auction (8-6-2010)
- Fertitta family, lenders maintain highest bid for Station Casinos properties (8-5-2010)
- 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)
RENO – Federal bankruptcy Judge Gregg Zive on Friday approved a plan for Station Casinos to emerge from bankruptcy.
Thirteen months ago, Station Casinos entered the bankruptcy court faced with a $6.6 billion debt and the possibility of selling off some of its 18 casinos.
Zive said the plan “does provide the best opportunity to maximize these assets.” He said it protects “a great number of jobs” in the company, which employs 12,000 workers.
Thomas Kreller, a Los Angeles lawyer representing Station, said that despite the approval of the judge, “the work is not over.”
The plan has to be put into effect and state gaming regulators still have to approve the changes within the company.
Under the plan, Station reached an agreement with unsecured bondholders owed $2.8 billion who will see their debt canceled. Some bondholders are investing up to $100 million for a 15 percent stake in part of the company.
A settlement with other lenders calls for them to buy $5.95 million in revolving credit commitments in a new Station credit agreement and for Station to pay $2 million of the lender’s $3 million-plus costs in legal fees and expenses.
Under the plan the casinos will continue as one company with the Fertitta family still managing the operation.
Kreller said there will be an eight-member board of directors. The Fertittas and the creditors each will choose three members. The Fertittas will then select the final two that must be approved by the creditors.
He said there were no objections to the final reorganization plan and all 17 voting classes overwhelmingly agreed to accept it.
After approval by Zive, Scott Nielson, executive vice president of Station, said “This plan will make us a much stronger and healthier company going forward.”
Nielson said the company was grateful to the team, guests and creditors for support through the reorganization process. The company suffered an $855 million operating loss in 2009.
At one time during the 13 months of proceedings, 11 casinos were put up for auction, but the Fertittas and lending group put up a “stalking horse” bid of $772 million. There were no other bids.
Judge Zive said the case became “contentious” at times but ended up with a “consensual plan.”
”There was no unfair discrimination,” the judge said in approving the settlement. “It does not prejudice any party in interest.”
Not included in the bankruptcy reorganization were Green Valley Ranch and Aliante Station. They are working to restructure their debt. The Greenspun family, owner of the Las Vegas Sun, is a partner with Station in those two operations.
There were more than 20 lawyers in the courtroom for the final hearing that lasted nearly two hours.
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Who says the mob families aren't in Vegas. ya'right!
write off $2.8billion in debt from holders only to ask the holders to come back and buy $100million again? Are the HOLDERS as #$%^&* up, as most of the banks are these days? Why would you do it a second time??
mockery of a sham----why is this family still involved in the gaming business--WHERE IS THE GAMING CONTROL BOARD! This court is a total fraud--run the company into bankruptcy and then get it handed right back to you with little debt and almost no stings--and then have the nerve to claim they "protected jobs"---this scum could care less about any of the employees---what a scam. Everyone regular person agrees these properties should have been split up and sold to the highest bidder. Again the old families have screwed las vegas residents and continue to do so.
Why so angry, guys?
As usual, those commenting on this whole Stations bankruptcy matter are SEETHING with anger that the Fertittas will retain control of THEIR company, and that more than twelve thousand team members will remain EMPLOYED AND PRODUCTIVE.
By any measure, these facts should be considered GOOD things, and yet most of you are so angry at this process (and outcome) that you're practically spewing bile across your keyboards!
Again, I ask, "Why the anger/jealousy/bitterness at those who have the talent and motivation to keep a popular and profitable chain of locals hotels afloat during this treacherous recession?". Were you really HOPING for the failure of our company, which probably employs several of your friends, neighbors, maybe even your family members? Were you hoping some bank or group of creditors with no knowledge, experience, or talent for these enterprises was going to TAKE these casinos and try to run them THEMSELVES?
Were you praying for economic DISASTER?
Those of you wishing the worst for Stations and the Fertittas should probably question your own motivation(s) for your animosity. I, clearly, have my own reasons for celebrating (finally!) the anticipated ending of this bankruptcy, but I can't imagine rabidly spewing such ill-will on even my employer's competitors.
Congratulations to the Fertittas, and good luck out there to everyone else (yes, even YOU, Mr. Lucky;)!
Nice post, loyal_employee.
Lots of bitter people on these boards. Easy to be a judge, especially when you've never had to make those hard decisions and deal with all of the challenges that come with running a huge company.
They simply overextended themselves to take the company private. Bad economy or not, they were at the helm and the company went bankrupt. Wynn did not go bankrupt. MGM did not go bankrupt. LVS did not go bankrupt. Boyd did not go bankrupt. The Fertittas did. How is it so difficult to understand that those at the helm when bankruptcy was declared should not be given back the company with billions wiped off the debt? Enough with the "bitterness" excuse. It's simply a matter of right and wrong.
Tom, no doubt that they overextended themselves, but it's annoying to hear posters actually hope for people to fail. Wynn did not go bankrupt, he's a smart guy that had Macau and a relatively strong balance sheet. Sheldon also had Macau. MGM has been closer to bankruptcy that I think any of us realize. Those companies are very different from Station.
There's enough bad news without having to hear the Monday morning quarterbacks judge how a business was/is run, especially when they do it with such certainty and without ever having done it themselves. Despite the fact that the Fertitta's are the face of the business, the reality is that there other groups influencing the decisions. That doesn't mean they're without fault, but some of the nasty comments and accusations about the family are way out of line.
Wiping out majority of bondholders was planned hoax from Fertitta family and they acted cooperation with Apollo (private equity guys).
They put that worthless part of bonds in these different entities (Solar capital = ex-Magnetar ) and sold to clueless retail/institutional investors and kept small part of most senior debt on own hands, to retain control if that outrageous leveraged buyout wont work.
To Fertittas that was:
Heads, i win, tails, i win.
http://google.brand.edgar-online.com/dis...
In these kind of situations, gaming board should take Fertittas license away, and let those real businessman's like Phil Ruffin buy the company from auction,
Why anyone would like to take risks with own money if you can outsource all risk to clueless retail/institutional investors or taxpayers, you just keep all profits.
I agree with local employee. I do not understand the hostility.
If another business group or banking group had a better idea for the properties, then they would have presented it in bankruptcy court and prevailed. They did not.
So people are still employed, bills will be paid, children of employees will be schooled and fed, and the banks will write off their losses and get a tax advantage.
A win-win for everyone.
That doesn't mean they're without fault, but some of the nasty comments and accusations about the family are way out of line.
Please tell me if their backgorund is NOT out of line.......
http://www.americanmafia.com/Inside_Vega...
http://unlimitedfightnews.com/wordpress/...
"Nick_Danger
If another business group or banking group had a better idea for the properties, then they would have presented it in bankruptcy court and prevailed. They did not."
They tried but it was unfair situation, because those charlatans who leveraged company down in first place, had an edge on bidding process. Better way to handle this process would be by taking gaming license away from chapter 11 candidates and let new group try if they can operate any better.
"Boyd Gaming Corp. abandoned its bid for some assets of Station Casinos Inc.,
"We have concluded this opportunity no longer makes sense for our company," Chief Executive Officer Keith Smith said today in a statement. He cited "bidding procedures that favor Station insiders" and the properties' limited potential as reasons."
"Nick_Danger
So people are still employed, bills will be paid, children of employees will be schooled and fed, and the banks will write off their losses and get a tax advantage. A win-win for everyone."
Win those bond holders too who just get wiped out?
This was Win-Win for Fertittas & Apollo, not everyone.
jaquekeno, sorry, but those bloggers are complete sensationalists. So they attended a convict's welcome home party and they contribute to Harry Reid's campaign. And hold on! Frank Jr "graduated through the ranks" from bell boy to blackjack dealer? they make it sound like he went from running numbers to sticking ice picks in people's eyeballs. Lots of people post on these boards that lived in Vegas in the 70's and earlier. I'd like to know how likely it is that, if you worked in the casino industry during that time, with an Italian last name that went to Catholic church on a regular basis, that you would know people that were crooked or considered to be in the mob. But no, he must be one of the heads of the five families. Do people ever consider that he met people while living life, not necessarily while he was performing criminal acts?
I guess if that justifies the accusations that they're mobbed up, then I can't really take you seriously. You people watch too many movies, or you're still living in the 70's.
Back on topic"look, they made some bad bets, the worst of which was putting all (or almost all) of their eggs in the Las Vegas basket. The gambled on this city. They employ people in this city. They pay taxes in this city/state. They're not doing it out of charity, but they've done A LOT for this town and this state. Argue that all day if you want, but just because they don't toot their own horn about what they do for the city doesn't mean it didn't happen. No surprise, but almost 100% of the money donated in this town is done for PR reasons. That family has donated a TON of money and many times they never said anything about and never wanted any recognition. That's sincerity, and you almost never see that in the world, especially not this city. Again, they're not perfect angels, they're businessmen, but they do care about people and this town.
Why would we want them to fail?
It's one thing to say they don't deserve to run a company that filed for bankruptcy under their watch, it's another to accuse them of being bad people or criminals.
I envision Judge Zive retiring from the bench and then being selected to the board of the new comnpany for a 7 figure salary.
Ranni:
The banks and the syndicates who loaned the money agreed to the plan. No tears for them.
If they wanted to object to the plan they could have and through the process they could have put the kibosh on the plan. They chose not to do so. They made a business decision to either be part of the plan or move on. In the words of Don Rickles (Crapgame) in Kellys' Heroes, they: "Made a deal deal."
So get over it and see how the new organization does.
By the way, what would have your best case scenario been for all of these casinos?
I'm offended Zive said it protects "a great number of jobs" in the company. That should not have been any concern of the court, and should not have influenced any of his decisions. The courts job is to protect the interests of investors and creditors.
Whoever ended up owning the properties, they would have been acquired for their intended use -- and the employees would be retained or new employees hired. It is sickening that the judge thinks "his" decision protects jobs. What hubris.
anyone arguing for the fertittas are probably friends of the family or part of their clueless management team---an auction should have occurred and we should have several new owners running these properties--not the rip off people who already stole all the money---the employee argument is false--anyone buying these properties would also have to keep employees. The reason no one "stepped up" to buy the properties is because the rip off system never gave anyone a chance to bid on the properties at auction---just another insider deal handing the elite upper class more money for nothing.
ImproveLV, I would hardly call Steve Miller, a former las Vegas City Councilman, a sensationalist blogger. The Fertittas own the land underneath several strip joints, operated by known mob men. You don't think that illegal, given gaming commission restrictions on associations with persons of ill repute?
mrlucky --
This wasn't "just another insider deal handing the elite upper class more money for nothing." And it wasn't, as Ranni characterizes it, "sold to clueless retail/institutional investors."
The rules were clear, and the investors took their relative position.
While the end result looks ugly, it's not uncommon for people to profit at others expense. The end result isn't enough to condemn the process.
This judge, on the other hand, does not seem to understand the courts position as a steward. He seems to buy into a lot of feel-good arguments, and issues statements that suspiciously look like they come from a seasoned PR department.