The Wall Street Journal reports:
The founding family of Las Vegas casino owner and operator Station Casinos Inc. appeared poised to remain in control of the company as a bankruptcy judge approved a determination that a group backed by the family had made the only qualified bid in an auction for part of the company.
While the plan still needs to be finalized in future hearings, the decision will most likely assure that brothers Frank and Lorenzo Fertitta , who made a fortune when they took the company their father founded private and loaded it with debt, will end up in control, with much of the company's $5.9 billion debt wiped out.
"The truth is we don't know that people are going to go back to the tables and slots like they used to, because we've never seen the casino market go through this type of recession where there was so much invested capital that was looking at the industry as if it was going to go on forever," said Keith Foley, a Moody's analyst who wrote a recent industry report expressing concern about the industry's prospects.
In the case of Station, the company assumed $3.3 billion in additional debt when Frank and Lorenzo Fertitta-the sons of the founder Frank Fertitta-took it private with Colony Capital for $8.8 billion in 2007, just as the markets were beginning to turn. The Fertitta family and other executives got $1.5 billion from the buyout and invested $900 million of that back into the company for a 24% stake.
MMA Payout comments:
If you combine the ~$120 million from the 10% stake in Zuffa with the company's rather aggressive dividend policy over the last few years, the Fertitta's have received more than enough cash to fund this Station retention bid without dipping into family money.
I've long asserted that the sale of 10% of the UFC was related to cash flow issues the Fertitta brothers were having related to the Station Casino bankruptcy.
It was clear before, but now it should be crystal clear and obvious that that was the case.