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Published Thursday, Feb. 25, 2010 | 5 a.m.
Updated Thursday, Feb. 25, 2010 | 10:41 a.m.
Sun archives
- Bankruptcy judge urges Station Casinos, creditors to negotiate (1-25-2010)
- Fertittas seek to block creditors’ lawsuit in Station bankruptcy case (1-12-2010)
- Company might manage 4 Station Casinos properties (1-6-2010)
- Station Casinos bondholders want permission to sue (12-29-2009)
- AG says any Station Casinos trustee must be licensed by gaming regulators (12-3-2009)
- Station Casinos, lenders agree to rent decrease at 4 properties (11-20-2009)
- Creditors want to expand probe of Station Casinos deal (11-19-2009)
- Station Casinos’ loss widens on reorganization costs (11-16-2009)
- Station Casinos wants more time to restructure finances (10-16-2009)
- Judge grants request of Station Casinos creditors to probe 2007 deal (9-30-2009)
- Station Casinos opposes creditors’ request to probe 2007 deal (9-29-2009)
Station Casinos Inc. today announced it has reached an agreement with key lenders that the company hopes will clear the way for it to receive approval to emerge from bankruptcy this summer.
While the company didn’t disclose details, the arrangement with lenders holding $2.475 billion of debt secured by four of Station’s most valuable hotel-casinos is expected to result in the lenders swapping some debt for equity in the company.
While there has been discussion in the bankruptcy case that the lenders could take control of the four properties and that the properties would be spun off or sold, the agreement disclosed today does not do that.
Instead, the deal — if approved — would keep the company and its 18 casino properties and extensive land holdings together.
It’s expected members of the founding Fertitta family, along with Station majority owner Colony Capital of Los Angeles, would maintain equity stakes.
The Fertittas would make a substantial, but undisclosed, equity investment and the current management team led by Chairman and Chief Executive Frank Fertitta III would continue to lead the company.
“We are extremely pleased to have reached an agreement in principle with certain of our key mortgage lenders for the comprehensive reorganization of our Company,” Fertitta III said in a statement. “This is a very important step in our restructuring process. Our commitment to the successful restructuring of our company is demonstrated by (my brother) Lorenzo and me making a significant investment in the reorganized company. This restructuring will create a much stronger company going forward that will benefit our team members, guests and the Las Vegas community as a whole.”
In a regulatory filing, the Las Vegas company said it “reached an agreement in principal for the comprehensive reorganization of the company with certain of its key mortgage lenders holding the debt secured by Red Rock Casino Resort Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino and Sunset Station Hotel & Casino.”
“The company is also making significant progress on its restructuring discussions with other creditor groups,” Station said in its statement.
“As part of the proposed reorganization, the company expects to significantly reduce its secured and unsecured debt and also would have substantial liquidity in the form of new revolving credit facilities and equity infusions.”
The capital infusions include a “significant reinvestment” by the Fertittas “along side certain other creditors and investors in the company,” Station said in its statement.
Station, which filed for bankruptcy reorganization July 28 after the recession reduced revenue and made it impossible to meet its debt obligations, last reported total debt and liabilities of $7.5 billion.
With today’s announcement, Station signaled it’s still not interested in entertaining any buyout offers from competitor Boyd Gaming Corp.
And left unanswered today was the fate of $2.3 billion in unsecured bond debt. The unsecured creditors have been agitating for the right to sue Station to limit their losses. Their request, which Station opposes, hasn’t been ruled on by Station’s bankruptcy judge.
Separately, Station on Wednesday sought bankruptcy court approval for extension of an agreement that lowered the rent Station pays itself to lease the four properties covered in today's announcement: Red Rock Resort and Boulder, Sunset and Palace Station.
The rent is earmarked to cover mortgage payments for the four properties.
Station disclosed in November that under the deal with Deutsche Bank and other lenders, the rent would be reduced by about $7.7 million per month for December, January and February. The rent would be about $13.8 million per month during this period, Station said.
Wednesday's court filing said this arrangement would be extended to cover the March and April rent payments.
"The debtors, the mortgage lenders ... and the steering committee of (pre-bankruptcy) lenders are engaged in negotiations for a plan of reorganization," Station attorneys said in Wednesday's filing. "The debtors are in preliminary communication with the UCC (Official Committee of Unsecured Creditors) regarding such a plan of reorganization and expect to shortly commence substantive discussions with the UCC."
Station said in court papers the 60-day extension of the reduced-rent agreement would facilitate the restructuring discussions.
The compromise was significant because lenders not a party to the mortgage loans had complained the rental and mortgage payments were excessive, given that the recession has reduced the value of the four hotel-casinos, and were diverting cash to the mortgage lenders to the detriment of other creditors.
Good, maybe now we can get back to business without all this bankruptcy stuff, rumors, and misinformation swirling around our heads. Kudos to you Frank and Lorenzo.
" The Fertittas would make a substantial, but undisclosed, equity investment and the current management team led by Chairman and Chief Executive Frank Fertitta III would continue to lead the company."
This is the ONLY way a deal could be worked out since the Fertittas raped the lenders to begin with.
Greedy people--stick casinos in everyones backyards, pillage them and then because that's not enough, pillage the company--they should give the Fertitta's a new slot card called the "Hoarding Pass". I would love to see ads on TV of people that LOSE money at Station properties "Joe lost his house!" "Susan lost her car!" "Sally got arrested for embezzling money from her company so she could play video poker at Station Casinos" What do you think?
casinonewsfreak...
I would pay money to see ads like that.
Helvetico... are yo the gardener for one of the Fertitta's?
And they utterly stick it to "unsecured creditors" like the laundry companies, the suppliers of everything from glasses to booze, the little people who were just trying to make a living.
The Fertittas are below pond scum, and I hope they get what they deserve. Big time...
Boycott Stations!
Casinonewsfreak: Right On!! I'd even help pay to produce and broadcast ads like that!!
As for the Fertittas, well, they represent some of the worst aspects of human avarice; Pray that some manner of cosmic justice befalls them.
Some of these comments make me laugh. Some poeple act like everybody is forced to gamble at Station Casios.
tvegas has it right.....if you don't like Station Casinos just don't patronize them.
The Fertittas are some of the best people in this community. They make huge charitable contributions and employ thousands of people. The posters who criticize them are simply jealous and small-minded. Great to hear that the Fertittas will remain in charge and will protect thousands of jobs for our town.
Are there still some Optimum Play Videpoker banks left? And if so, is it true that they're not honoring any more points on these machines?
Fictional Joe, Fictional Susan, and Fictional Sally should have had a gamblers anonymous intervention well before they got to the dire straits they fictionally found themselves in. If you don't like Stations, don't go. I know many people who are happily employed by them. I will enjoy a movie, or a dinner and drinks, or throw a few bucks in a machine at a Stations property well before I went to a rundown Boyd or a pretentious strip property.
The real people with problems are the labor unions protesting companies for more, more, more whenever *no one* is doing very well right now.
I would not count Boyd out yet. They have "substantial" means to counter a Fertitta family/Colony Capital proposal. This is all still very interesting.
I wonder if this means they will bring their call center back from india to Las Vegas and rehire all the people who lost their jobs.
Great Stations reached a deal with some of its creditors and at the same time screwed over every unsecured bond holder that should have been paid off when they did their little buyout scheme. I call it a scheme because thats what it was. They intentionally structured it in a way to screw over the existing bondholders.
These guys will certainly rot in hell for what they have done.
There are many classes of creditors in the Stations Casinos case. Colony/Fertittas have to reach an agreement with most of the classes before a Chapter 11 Plan can be approved by the judge, perhaps over the objection of some classes of creditors.
The ONLY class of creditors with whom Stations management has reached agreement, as described in today's news are the "PropCo Lenders".
Stations Management still has to reach agreement with the "OpCo Lenders", four separate sets of "Mezzanine Lenders", the "Old Bond Holders" and the "General Unsecured Creditors". There is still a whole lot of negotiating and conceding to be done before a Disclosure Statement and Chapter 11 Plan can be sent to all of the classes of creditors for a vote.
That's the problem with these happy, "interim progress" press releases. In reality, they mean nothing until the whole package is put together.
Meantime a good time is being had by all lawyers involved, billing at high hourly rates. For those who want to see the actual court documents in the Stations Casinos main bankruptcy case, go to:
http://www.kccllc.net/stationcasinos
That case, by the way, does not yet include the bankruptcy involving the Colony/Fertitta entity which owns half of Green Valley Ranch. That is still a totally separate case with no free view public docket. The "first round" of the fight between the Fertittas and Greenspuns in that case will be fought at a hearing in mid April. Noting earth-shattering likely to come of it, except that the judge may decide whether to consolidate the case with the rest of the Stations Casinos bankruptcy cases.
Great to hear that the Fertittas will remain in charge and will protect thousands of jobs for our town.
You mean like the jobs in their cafes, uniform control or the two nightclubs at Santa Fe and Red Rock? The only jobs they are protecting are their own. The banks should have worked to have the Fertittas fired and invited to reapply at a lower rate without equity in the company. Let them feel the pain of working for years at the company, only to have their benefits along with their dignity stripped.
Get rid of the ridiculous "resort amenity fee" and you will find out how many more guests you will have at the Stations Hotels. Not even 40 per cent of all guests have their laptop with them, so why does everybody have to pay for internet access ? And the daily newspaper? What is that good for? It only creates a bunch of garbage, which is bad for the environment.
Think about when setting your next meeting and looking for improvements.
From Switzerland
Somebody needs to dangle enough carrots in front of the Fertittas and buy out their shares. Correct me if I'm wrong but from what I have read they only own 24% of the company. What about the people and companies that share the other 76% percent. Do they not have a voice in what happens to the company? Or maybe I'm looking at this all wrong. I would think that they would get together and have the majority in what happens in the company, again maybe I'm wrong. It does get sickening hearing about the Fertittas all the time and how they get all the breaks.
Guess you have to go to the RJ to get information about Green Valley Ranch.
Boyd will soon own stations. Those anti union jerks deserve everything they get.
CULINARY UNION LOCAL 226- WE RUN THE STRIP!
Greedy people--stick casinos in everyones backyards, pillage them and then because that's not enough, pillage the company--they should give the Fertitta's a new slot card called the "Hoarding Pass". I would love to see ads on TV of people that LOSE money at Station properties "Joe lost his house!" "Susan lost her car!" "Sally got arrested for embezzling money from her company so she could play video poker at Station Casinos" What do you think?
SO TRUE