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StumbleBlack Gaming files for Chapter 11 bankruptcy
Tuesday, March 2, 2010 | 9:07 a.m.
Sun Archives
- Black Gaming filing for Chapter 11 bankruptcy reorganization (12-23-09)
- Deliberate growth amid boom reflects Eureka owner’s heritage (8-23-09)
- Mesquite: Feeling pain from Vegas, getting down to business (8-23-09)
- Black Gaming warns again of possible bankruptcy (8-14-2009)
- Down economy means tourism suffering statewide (8-14-2009)
- Mesquite casino cites economy in reduction (12-2-2008)
Mesquite casino operator Black Gaming LLC and eight subsidiaries filed for Chapter 11 bankruptcy reorganization on Monday.
The filing was expected after a December announcement that the company would be reorganized and investors would gain equity stakes. The investors include South Point hotel-casino owner Michael Gaughan, Black Gaming executives Robert "Randy" Black Sr. and Anthony Toti; and Texas company Newport Global Advisors LP.
Monday's filing in U.S. Bankruptcy Court for Nevada listed liabilities of $253.4 million. The going concern "enterprise value" of Black Gaming and its subsidiaries was estimated at between $85 million to $90 million.
Creditors include secured noteholders represented by the Bank of New York Mellon Trust Co. owed $143 million; Wells Fargo Foothill Inc., owed $14.8 million under a secured loan; and subordinated noteholders, also represented by Bank of New York Mellon Trust, owed $75.4 million.
The company's properties include the Virgin River and CasaBlanca hotel-casinos as well as the closed Oasis hotel-casino. The company also owns the Virgin River Convention Center site, formerly the Mesquite Star hotel-casino, as well as timeshare operations, two golf courses and a gun club.
In all, Black Gaming said it has 2,100 hotel rooms, 97 timeshare units, 1,579 slot machines and 40 table games.
In a court filing, Black Gaming said the recession reduced its revenue and as the competing Eureka hotel-casino expanded, Black Gaming's share of the Mesquite market has declined to about 54 percent. In 2005, Black Gaming reported its Mesquite market share was 68 percent.
Black Gaming said its casino revenue fell nearly 24 percent from 2007 to $81.8 million in 2008. Casino revenue fell again in 2009 to $62.6 million.
Net revenue including gaming, hotel and food and beverage operations of $131.6 million in 2008 fell to $97.8 million in 2009, the company said.
"In the last few years, the debtors have faced dramatically declining hotel and casino revenues based on reduced consumer spending, a tightening credit market and an overall weakening economy," Black Gaming said in court papers Monday. "These market-driven challenges manifested after the debtors leveraged themselves in 2004, thus leaving the debtors in a highly precarious position at a time when they needed robust financial performance."
Under terms of the prepackaged bankruptcy that certain lenders agreed to in December:
• Debt owed to Wells Fargo Foothill Inc. would be paid in full.
• The senior secured noteholders would exchange their notes and claims for a new credit facility of $62.5 million.
• Senior subordinated noteholders would receive warrants to buy equity interests in the reorganized company in exchange for their notes and claims.
• General unsecured claims, such as those from trade vendors, would be paid in cash.
• Investors in the newly organized company would put up more than $18.5 million for a 94 percent equity stake in the reorganized company.
• Black Sr. will remain chief executive, Toti will remain chief operating officer and Sean McKay will remain chief financial officer.
Black Gaming said in December that holders of 70 percent of the secured notes had agreed to the reorganization plan.
Also, Black Gaming said in court papers that in order to save money it has moved its corporate offices from Summerlin to the CasaBlanca. The company had been paying monthly rent of $11,508 for the Summerlin office space owned in part by Robert Black Sr.
Black Sr. said in a press release Monday: "We are moving forward with our plans as previously outlined in the lockup agreement (with lenders). As previously stated, our problem is one of leverage; we have more debt than our operations can support. Our agreement with our lenders is designed to resolve this by restructuring our debt to a level our operations can sustain and to provide additional capital."
The company said it will continue operating under current management on a "business as usual" basis.
"The company anticipates that it will continue timely payments to vendors under normal trade terms, as currently being made, without interruption and will honor all customer deposits and commitments," Black Gaming's press release said.
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And the collapse continues...
i had this place as one of my accounts when i sold ads for "the other paper" in las vegas from 2002 - 2005 and i had a feeling even then that this was going to happen.
as more "modern" local places like green valley ranch, red rock, m resort, etc. opened it was going to eat away at mesquite's market share.
spa and golf, spa and golf, spa and golf, spa and golf...that same marketing message over and over and over again got old.
i begged them to do a chinese new year, st. patrick's day,..ANY kind of promotion that wasn't "spa and golf" and it always fell on deaf ears.
Well, maybe this down-turn in business will weed out the "slackers"....
Another casino company that tried to rip off its few remaining patrons by putting in horrible table games. A few years ago, I would regularly visit Mesquite to play some of the good games offered at the time. Sadly, the good games disappeared long ago, along with many of the patrons.
SmarterThanYou - The bankrupsy is for his company not him personally. He has more than enough to finsih the house and will have change left.
I think the entire city of Mesquite will soon become deserted....a few restaurants and a gas station maybe. But the people who came from far away will gladly drive on another 2 hours and hitting the super capital of gaming instead of hanging around in a rat nest.
From Switzerland
BorisR-
The few restaurants and gas station was pretty much where it started. I'm sure Si Redd would weep. Trust me- there will be people who hang on there. Why shouldn't they? They don't pay the same prices for services, as the rest of Clark County, but they get a share of Clark Co. money!
Randy Black (and his brothers) have screwed that town for too many years. I hope that he has to sell all of those properties to people who won't continue the policy of annual, mass layoffs. Randy used to do his, in late November-December.
"Hello disposable worker: you don't have a job-starting right now. If you don't make a fuss, you can come back in 6 months, with no advance in senority, at maybe a cut in pay. Here's a turkey, because Black Gaming CARES. Merry Christmas."
Welcome to the OBAMA recovery!
Golf and SPA and Golf And Spa and Casino and Golf And Spa and Casino and Spa and Golf and SPA.....in the middle of the desert, when it's hot outside....people want casino gambling, lounge entertainment, good food, great videopoker and a good atmosphere. No playing golf when it's 110 outside....
That's my opinion.
From Switzerland