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Bankruptcy judge approves Station Casinos reorganization plan
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JASON BEAN/LAS VEGAS REVIEW-JOURNAL
Red Rock Resort will remain in control of the Fertitta family as part of a plan that was allowed Friday by a bankruptcy judge. Also remaining part of Station Casinos are Palace Station, Sunset Station, Boulder Station and the Wild Wild West. » Buy this photo
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LAS VEGAS REVIEW-JOURNAL
A federal bankruptcy judge in Reno confirmed Station Casinos' plan of reorganization Friday after 90 percent of the company's secured and unsecured creditors signed off on the deal, which will wipe some $4 billion in debt from the company's books.
The plan will give creditors an ownership stake in the reconfigured operation, with the Fertitta family remaining in control of the company.
The hearing in front of U.S. Bankruptcy Judge Gregg Zive took a little more than an hour.
In remarks from the bench, Zive said his goal at the outset of the process was to ensure that a "fair and equitable" plan of reorganization was approved. He was happy that all 17 classes of the company's creditors eventually signed off on the deal.
Zive called the reorganization plan complicated, but he said it will allow the company to service its remaining debt.
Station Casinos filed for Chapter 11 bankruptcy reorganization in July 2009, owing some $6 billion. The company is expected to emerge from bankruptcy in early 2011 with a more manageable debt of $2 billion.
Before the bankruptcy filing, the company's creditors rejected an offer that would have allowed the Fertitta family and real estate investor Colony Capital to retain control.
According to Bloomberg News, at least $1.7 billion of Station's debt was the result of a leveraged buyout in November 2007 by Fertitta Colony Partners, which took the casino operator private.
Nevada gaming regulators and the National Indian Gaming Commission will have to confirm the new corporate ownership structure.
Under the reorganization plan, a new holding company was established, owned by Colony Capital, secured lenders Deutsche Bank and JP Morgan, and Fertitta Gaming, which was formed by Station Casinos founders Frank Fertitta III and his brother, Lorenzo.
The new company takes over Red Rock Resort, Palace Station, Sunset Station, Boulder Station and the Wild Wild West and its adjoining 110 acres. Those casinos provide more than half of Station Casinos' overall revenues.
The Fertittas will put up $85 million for their share of this company.
Fertitta Gaming also won a bankruptcy-supervised auction to acquire 11 casinos, land holdings and American Indian gaming contracts for $772 million. Fertitta Gaming was the only qualified bidder and companies, including Boyd Gaming Corp., declined to bid after Station Casinos announced a settlement with bondholders. Boyd said the court-supervised bidding process was tilted in favor of the Fertittas and the secured creditors.
Fertitta Gaming will operate both sides of the reorganized company and the Station Casinos name will remain.
Still to be determined is the future of Green Valley Ranch Resort and Aliante Station, which were not part of the bankruptcy. Station Casinos operates the casinos in a 50-50 joint venture with the Greenspun family and the owners are working to restructure debt.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
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it was reported today that las vegas housing prices hit a 20 year low today. anyone else "upside down"? business gets a honey of a deal.....again. looks like the fertittas got a winning deal for themselves. still gonna pay your mortgage?
Way to go! the FRITO brothers have scored another coup. It looks like they have been reading the 'Donald CHUMP' book for sucess. OF course they'll need to declare bankruptcy 2 more times to match THE DONALD.
Is that name Zive like in "shivvvv". . . . Hmmmmm. Kind of fits. Just how much money did Greggie get from the F-boys?????
Well, kids, it's obvious who owns the Federal bankruptcy court in Reno. Get it now???
But, these two boys can only skim and con so long. They too will end up old, drooling, babbling and incontinent. Yeow. That's real sexy. Pass the bed pan Sally . . .
Best place to find quality quality bankruptcy info online is http://bit.ly/cpmRHo
Imagine that. If I were an investor or a business seeking to do business with the Fertittas, I would expect payment up front or a payment plan, in writing, with no caveats before I would even consider doing business with them.
what an inside deal that was.
vegasmattaes,
You can seek bankruptcy and have all your unsecured and secured debts wiped away (you will lose the property that secures the secured debt, though). This is exactly what the Fertittas did. Though I will say they obviously have a decent firewall between their personal and corporate assets.
THE FERTITAS MUST HAVE MADE THE FINAL PAYMENT TO THE JUDGE!
Man - I wish I could "reorganize", wipe out 2/3 of my debts and carry on business as usual!