Station Casinos Attempting to File for Chapter 11 Bankruptcy
by skwirrl on Feb 5, 2009 8:14 AM EST
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PrintFeb. 4 (Bloomberg) -- Station Casinos Inc., the Las Vegas gambling company taken private by management and Colony Capital LLC in 2007, proposed filing for bankruptcy in collaboration with lenders as it struggles to pay the debt from the buyout.
The company offered investors 10 cents to 50 cents on the dollar in secured notes and cash, in exchange for about $2.3 billion of existing bonds, Station Casinos said in a statement yesterday. Some secured lenders have agreed to support the plan, the company said.
Station, which promotes its casinos to local gamblers in the Las Vegas area, had trouble paying creditors in a market among the hardest hit by deteriorating home prices and recession- driven job losses. Gambling revenue in Las Vegas last year may have fallen the most on record.
Unsecured bondholders “would prefer more cash to go their way,” said Chris Snow, a debt analyst at CreditSights Inc. in New York. “It certainly helps that the sponsors are putting up more capital in the form of equity.”
It seems Fertittas and Colony will have to come up with some cash to insert in the venture if they wanna have any hope of keeping their sasinos
As part of the proposal, affiliates of the Fertitta family and Colony Capital have agreed to invest as much as $244 million to maintain their current ownership stakes.
In December, Station abandoned a debt-exchange offer for some senior notes after trying to prod investors to accept a below-face-value cash payment or new, discounted notes with longer maturities.
If enough bondholders agree to this proposal, the company may file for Chapter 11 bankruptcy, Station Casinos said in the statement. Under bankruptcy regulations, two-thirds of senior noteholders and two-thirds of subordinated noteholders have to agree with the plan before it is filed.
Station Casinos missed a scheduled $14.6 million bond interest payment on Feb. 2, ahead of the restructure plan. The company said yesterday it had about $350 million in cash as of Jan. 31 to fund operations.
So do the Fertittas hold ZUFFA or do they try and retain controlling interest of their family's baby from bondholders?
Harrah’s Entertainment Inc., the world’s largest casino company, swapped $2.22 billion in bonds for new notes and cash in December in a sweetened exchange offer aimed at pushing back maturities and reducing debt.
Leon Black’s Apollo Management LP and TPG Inc. acquired Harrah’s in January 2008 for $30.7 billion, including $13.4 billion in assumed debt and transaction costs.
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I'm on my mobile.
But just Google Station Casinos and read the recent news articles. I believe this was from the AP newswire.
Gimme 1 Round!
So do the Fertittas hold ZUFFA or do they try and retain controlling interest of their family’s baby from bondholders?
Fertitta’s don’t have a controlling interest in the first place. Colony owns 75, Fertitta bros. own 25.
I'm not talking controlling interest
I’m talking is the Fertitta family baby going to become a largely bank held asset with them owning only a few percent
Gimme 1 Round!
You mean like it is now? Frank 3rd, Lorenzo, Delise Sartini, and Blake Sartini own 25(that would be 6.25 each). Station Casino is largely a capital investment firm held asset already.
Oh and if you break that down from the $244 million that would be $15.25million a family member. Do you think Frank and Lorenzo are going to sell Zuffa just to raise $30million? Hell they can probably just take that out of Zuffa’s January profits and still be billionaires.
This shouldn’t be read as “OMG STATION IS GOING OUT OF BUSINESS!!” It should be read as they’re are trying to implement a strategy to get themselves out of debt and restructure for lower costs and interest payments.
Also, it’s been reported that they missed a 14.6 million dollar interest payment last month, when in actual fact, they chose to not make the payment in light of this restructuring.
It’s not a glowing time for Station, but Chapter 11 is often used in the US to avoid creditor problems and to give them time to restructure. And it certainly seems like they have a plan in place, but who knows if it’ll work or not with the economy how it is.
They were likely to miss that payment anyways
And this restructuring hasn’t been approved yet
Gimme 1 Round!
Yes, because it makes sense to let the company to go out of business and none of their creditors to get any money. From the article linked, they already have a plan and if it doesn’t get approved, they can always resort to Chapter 11, get protection from their creditors and restructure anyway. Station is a large company and isn’t going anywhere. Also, it is highly dubious that this will affect Zuffa in any way whatsoever. So why is this even on here and why are we talking about it? wurs mah mma newz
Chapter 11 is reorganization, if they file chapter 11 then their would be no reason for the Ferititta’s to come up with any money or involve Zuffa in any way with this.
Did nobody read this
They are having to insert another 250 million in equity into the company for the bondholders to consider this deal.
Gimme 1 Round!
Yur right I should of said “future” money. They have already agreed to up to $244 million(25% of that would be $61 million). If they have agreed to it then they most likely have already got those funds accounted for and in place(you don’t make an offer like that unless you have the funds worked out), that is assuming that the Feretitta’s are offering to put up any of their money at all, investing $244 million doesn’t neccessarily mean that they are investing personal money or an all at once payment. It also could be Colony Capital putting up the full amount, they are a fairly large and successful real estate investment firm.
Really when you look at it would the billionaire filled Ferititta family (not all of the Fertitta family with ownership in Station also have ownership in Zuffa) sell off a billion dollar company to raise $60 million dollars or would they just raise the money?
It’s the wrong time to try to restructure. 2 or 3 years ago companies in trouble could find an investor. These days companies going to Chapter 11 aren’t coming back out. If the Fertittas aren’t going to invest their own money than there only option would probably be to sell. I don’t know their casino’s location in Vegas but if it’s a good spot it would still sell itself.
The fact that Lorenzo went to the UFC earlier this year most likely means that they will not sell Zuffa. Sorry Skwirrl, you will probably get to rant and rave for many years about those evil Fertittas and their head minion Dana White while they continue to chug along on their wheels greased with the squished remains of fighters they have used and abused over the years.
Perhaps a stupid question...
I have never been to Vegas- and so I apologize in advance if this is a stupid question, but why doesn’t Station Casino’s host more UFC events? Is it merely a question of facilities and if that is the case, wouldn’t it have behooved them to build an arena? It always seemed like there is a lot of money going out the door hosting events at other (competing) casinos. I am not suggesting that their money woes would be solved by this, but it seems they are missing out on a lot of revenue. Please enlighten me.
by I don't wear mma t-shirts on Feb 5, 2009 2:34 PM EST reply actions
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