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Gaming Guru

Arnold M. Knightly
 

Date set for Station restructuring

19 July 2010

RENO, Nevada -- The U.S. bankruptcy court in Reno on Thursday cleared the way for Station Casinos to begin soliciting votes from its lenders on its reorganization plan.

Judge Gregg Zive on Thursday approved the gaming company's disclosure statement and set an Aug. 27 date to begin hearings on the company's reorganization plan. A second day of hearings is scheduled for Aug. 30 if necessary.

A disclosure statement gives extensive information about the bankrupt company's business so its lenders can properly evaluate a proposed reorganization plan.

Station Casinos declined to comment after the hearing.

Judge Gregg Zive praised both sides after the hearing, which was scheduled for two days but lasted less than three hours, for reaching agreements on many objections and setting a time line to confirm the plan.

"For the most part, the parties were able to arrive at consensual resolution as to what should be disclosed and how it should be disclosed," Zive said. "I commend the parties for that and I think that's how the process is intended to work."

Objections to the reorganization plan are due Aug. 12 with replies due Aug. 20. Ballots are also due Aug. 20. All deadline times are 5 p.m. PST.

Half the secured and mortgage lenders holding at least two-thirds of the company's $6 billion debt are required for the reorganization plan to be approved, according to court documents.

The disclosure statement will be updated after next month's auction of 11 Station Casinos properties.

Zive told Station Casinos' attorneys to update the financial disclosure by Aug. 10 to show financial projections for the hotel- casinos being auctioned.

Station Casinos attorney Thomas Kreller agreed that providing any projections now would be premature.

"Until the auction is complete, we don't know who the winning bidder is," Kreller said. "We therefore don't know whose projections the lenders should be looking at."

The projections also will need to show that a winning bidder could pay any debt used to finance the auction, Zive said.

That may be required of the stalking horse bidder, too.

The stalking horse bid or starting bid for the 11 properties is backed by Fertitta Gaming, and supported by primary lenders Deutsche Bank and JP Morgan Chase & Co., and Station Casinos' co-owner Colony Capital.

The $772 million bid includes $455 million in new debt, according to court records.

The gaming company's advisers and attorneys are working to determine that the companies that have submitted letters of intent to bid on the Station Casinos properties are qualified bidders.

Financial adviser Lazard Freres & Co. confirmed to the Review-Journal that bids other than the stalking horse bid have been submitted but declined to say how many.
Date set for Station restructuring is republished from Online.CasinoCity.com.