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StumbleStation Casinos, bondholders settle dispute
Published Wednesday, July 28, 2010 | 4:27 p.m.
Updated Wednesday, July 28, 2010 | 7:25 p.m.
Sun archives
- 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)
A development in the Station Casinos Inc. bankruptcy case Wednesday may clear the way for the Las Vegas company to avoid continued litigation as it emerges from bankruptcy with the founding Fertitta family still in control.
Station filed court papers saying it has reached a settlement with bondholders owed $2.8 billion who have been fighting Station’s reorganization plans. That $2.8 billion reported in bankruptcy papers Wednesday is higher than the previously reported unsecured noteholder debt of between $2.3 billion and $2.5 billion.
“The settlement negotiations have been successful,” Station’s filing said, adding some of the bondholders have agreed to invest up to $100 million for a stake of up to 15 percent in a company that will control five Station “PropCo” properties.
The PropCo properties are Red Rock Resort, Boulder Station, Sunset Station, Palace Station and the Wild Wild West.
Those properties would be managed by Fertitta Gaming LLC and would be owned by Fertitta Gaming, Station co-owner Colony Capital LLC, the bondholder investors and banks holding the mortgage debt against the properties.
An auction for 11 more “OpCo” Station properties is set for next week, with the new Fertitta-led company the “stalking horse” bidder, or the bidder to beat for those casinos.
Those properties include Santa Fe and Texas Station and two Fiestas. The Fertittas could use the $100 million from the bondholders during the auction.
Two more properties — Green Valley Ranch and Aliante Station — aren’t part of the bankruptcy or the auction and Station said in court papers Wednesday that efforts continue to restructure their debt. The Greenspun family, owner of the Las Vegas Sun, is Station’s partner in those properties.
Attorneys for the bondholders, organized as the Official Committee of Unsecured Creditors, couldn’t immediately be reached for comment on the deal.
The settlement is expected to result in the extinguishment of the $2.8 billion in bondholder debt — which has been trading at levels far below the face amount. Certain bondholders would gain warrants and investment rights in the new company formed by the Fertittas, Colony Capital and the PropCo lenders.
“We are extremely pleased to have reached an agreement with the Unsecured Creditors’ Committee to support the proposed restructuring of Station Casinos Inc., including our bid for the OpCo assets,” said Marc Falcone, chief financial officer of Fertitta Gaming LLC. “Pursuant to the agreement, certain bondholders have agreed to invest up to $100 million to acquire up to 15 percent of our new company, which funds will be used, among other things, to aggressively pursue our proposed acquisition of the OpCo assets.”
The deal is seen as a major step forward for Station, as the bondholders will now support Station’s reorganization plans.
The bondholders in recent weeks had appealed several rulings in the case including the OpCo bidding procedures — charging the bidding was rigged to favor Station insiders and their lenders — and were seeking permission to sue Station insiders.
Their proposed suit, which is now off the table, would have complained the 2007 deal that took Station private harmed bondholders by loading the company with excessive additional debt and dooming it to failure.
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The Fertittas let the Co go down and they are being allowed to control 5 properties. Could someone enlighten me why they are being REWARDED with a minimum amount of capital when some other jerk who own a business goes bankrupt and loses their business. This being the case does an average jerk have a chance to win at their Casino?
During the course of three years working in management for a prominent Stations property, I physically saw Frank Fertitta exactly once, as he marched through the property with his entourage. I never saw Lorenzo.
Does this matter? No, of course not.
Why I mention this is a product of curiosity. I don't understand why the Fertitta family is so interested in keeping the Station brand. They made their money, in droves, through the company led buyout.
They clearly don't care about their casinos, outside of whatever profitability they may glean from them.
So a group of bond holders initiates a law suit to try and get their money back. Instead though they settle by promising to dump another $100M into the company for a stake?
I don't know if this proves if the law suit was B.S., if these Bond Holders are the dumbest investors on earth, or if this proves that the Fertittas are the greatest salesmen that ever lived by getting people who are trying to sue them for money to actually throw more cash at them...
Good job, Stations!
Looks to me like the Fertittas are running scared from the Boyd group. Giving 15% (for $100 mil) seems like a sweetheart deal designed to do about anything to keep the roperties away from Boyd Gaming. Personally, I wish Boyd would make a smart buy on the Station stuff and make a play on the Riviera. Say what they want, but, Boyd would benefit dramatically from having any performing property on the Strip.
There's an old saying that if you owe the bank a million dollars -- they own you. If you owe them a billion dollars -- you own them.
SheetWise,
I think you nailed it.
I find it funny that the same people that complain on here about how Stations lays people off or they made people reapply for jobs when they bought Santa Fe, are the ones now saying that they hope that the Fertitta's lose it all.
What do you think will happen to all those employees if a split does happen? The exact same thing. People will lose their jobs or will have to reapply for jobs.
The Fertitta's could not have predicted the collapse of the economy when they went in with Colony Capital. If they had a clear vision of the future, don't you think that they would have done things differently.
The 'businesses go bankrupt' comment... large companies do not go bankrupt anymore, they either work it out or the gOvt steps in. Just look at Govt... I mean General Motors
And Boyd... their properties are on a downhill skid, and they can't even move on Echelon... they need to tend their own yard before criticizing their neighbors.
In closing, if so many people are anti-Station Casinos, why is it that they are busy whenever I go in to one?
BROWNBROTHER.. Which Stations are busy when u go? Any Casino Is busy on weekends . As for Stations being so interested in their personal that couldn't be further from the truth.They were just GREEDY and are still getting a good deal with this bankruptcy. They should be allowed to bid on all the Casinos like any other creditor. You are a fool or a plant!
They took the playbook from Donald Trump. Just read about what he has done with his AC casinos and you will see what I mean. SheetWise is correct and this is what Donald Trump learned along time ago to his credit.
"The bondholders have agreed to invest up to $100 million for a stake of up to 15 percent in a company that will control five Station "PropCo" properties."
AHAHAHAHAHAHAHAHA!
Once a sucker, always a sucker!
chazbean,
The American public let America go down hill by hocking their souls for more then they could afford but I don't see you hating on them.
Good for Stations. Working out the same problems most Americans have, to much debt in a downturn. At least they will be able to keep writing pay checks for Thousands of people in this Valley each week.
VEGASLEE>>>>>>>> If u are talking about foreclosures your friend (CLINTON) forced the banks to give those undocumented loans. As for Stations they have the bankruptcy judge by the BA$$. It' not the point about writing checks to the employees it about ETHICS ,but u wouldn't know that.
Curious deal- I am not the sharpest knife in the drawer, but it would seam 2.8 billion should get you at least 15% without additional capital-but then who would actually loan 2.8 unsecured-frightening-the wheels are coming off everywhere
chazbean --
"It' not the point about writing checks to the employees it about ETHICS ,but u wouldn't know that."
Your poor spelling, grammer, structure, knowledge of history -- and law -- is followed by your claim of ethical superiority.
If you would like to supplant voluntary arrangements with central planning, then simply identify yourself as a socialist. There's nothing wrong with believing in fairy tales, but people in the real world would be happier if you all wore a magical crystal somewhere in plain sight of people otherwise reasoned. With your identity exposed, we could simply choose to not hire you.
Has it become a crime to not hire someone who wants to rape you? Curious minds want to know.