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Black Gaming LLC files bankruptcy
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LAS VEGAS REVIEW-JOURNAL
Updated: Mar. 3, 2010 | 12:56 a.m.
Mesquite casino operator Black Gaming LLC filed for Chapter 11 bankruptcy late Monday, a move the company foretold to investors just before Christmas.
The filing with the U.S. Bankruptcy Court in Las Vegas, where Black Gaming is headquartered, will allow the company to continue operations under current management. Payments to vendors will continue without interruption, company officials said.
The bankruptcy filing covers nine entities, including the three Mesquite casinos -- Oasis, CasaBlanca and Virgin River -- and other operations, including the Palms golf course.
According to a "lock-up" agreement, Black Gaming reached a deal with approximately 80 percent of its lenders, attorney Greg Garman said Monday.
Under the agreement, Black Gaming's debt will be reduced from $200 million to $62.5 million through a more-than $18 million cash investment from Black Gaming Chief Executive Officer Randy Black, Newport Global Advisors, Anthony Toti and South Point casino owner Michael Gaughan.
The partners will own 100 percent of Black Gaming. Gaughan's South Point casino will operate the race and sports books at the Mesquite casinos and will provide some back-of-the house management services.
Garman said the bankruptcy is being filed with a plan of reorganization attached. He was hopeful the bankruptcy could be discharged by the summer.
"In this era we haven't had a lot to look forward to," Garman said. "Having all the constituents on board means this could be in and out quickly."
In addition to the bankruptcy court, Nevada gaming regulators will also have to approve the restructuring.
Under the reorganization plan, Black will remain CEO, Toti will be chief operating officer and Sean McKay will remain as chief financial officer.
In statements last year, Black said the company was generating cash flow but was unable to manage its high amount of debt. Black, a longtime Las Vegas real estate developer, said the challenging economy of the past 24 months hurt the casino operator.
Black attempted to market his Mesquite casinos, about a 90-minute drive from downtown Las Vegas, as a weekend getaway for local residents. His folksy television commercials carried the tag line, "it's Mesquite," advertising the community as being different from casinos on the Strip or the Las Vegas locals market.
Last May, Black Gaming reduced operations at the Oasis, closing a Denny's restaurant, its go-kart track and a miniature golf course. The property's 900-room hotel, recreational vehicle park and convention facilities remained available for use on an overflow basis for the company's other Mesquite resorts.
Garman said the Oasis has "almost no function at all" but still operates 16 slot machines.
In December 2008, Black Gaming reduced the number of slot machines at the Oasis from 750 to 144 and shut down the Oasis' table games pit.
The Palms golf course, gun club and time share business remain open. Black Gaming did not close any operations at Virgin River and CasaBlanca.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
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Scott...their logic is to keep their gaming license active. They could care less if they get play on them.
It's interesting to note that Black Gaming is having trouble in this economic climate and yet its biggest competitor, The Eureka, is thriving.
DO YOU THINK THE INVESTORS WILL, " ALWAYS BET ON BLACK" NOW THAT 200 MILLION IS 62.5
INQUIRING MINDS WANT TO KNOW