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Gaming Guru

Tim O'Reiley
 

Family behind Jerry's Nugget gets deadline to round up financing

11 June 2013

LAS VEGAS -- The Stamis family has two weeks to round up the financing to exit Chapter 11 bankruptcy before the main lender gets a chance to oust them from their long-time ownership of locals casino Jerry’s Nugget.

At a hearing Monday, U.S. Bankruptcy Court Judge Mike Nakagawa extended until June 26 the so-called exclusivity period, during which only the owners of a bankrupt company can propose a reorganization plan. US Bank, the largest creditor of Jerry’s Nugget, wanted exclusivity ended Monday and will ask again at the next hearing unless the Stamis family can land fresh financing.

The plan submitted by ownership last month would have stretched repayments of the $3.8 million owed to US Bank over seven years, while another claim would be paid over three and a half years.

At the same time, the Stamis family — Jeremy Stamis is the president of Jerry’s Nugget — would pay in $400,000 to keep a controlling stake in the North Las Vegas landmark, which opened in 1964.

Jerry’s Nugget attorney Gerald Gordon said the ownership is now in advanced discussions to line up new loans that would pay off everyone in full and take US Bank out of the picture.

But as it stands now, US Bank attorney Lenard Schwartzer said, the plan would force even more delays on the bank concerning a loan that came due Oct. 1, 2011.

At the same time, he said, the proposed repurchase price would let the family keep control at a large discount to the estimated value of Jerry’s Nugget.

As a result, Schwartzer said, the bank has drawn up its own plan and will file it as soon as exclusivity is terminated. He did not offer details.

However, Gordon said, “This case from the very beginning ... has been characterized by demands by US Bank to liquidate this company.”

After monthslong discussions to restructure the US Bank loan failed, along with tandem efforts to line up new lenders, Jerry’s Nugget filed its Chapter 11 case Aug. 13.

Last year, according to court documents, net revenues grew 5.5 percent from 2011 to $23.8 million as both gaming and food and beverage started to rebound from the recession. However, expenses rose even faster, so the $53,000 operating profit during 2011 dropped to a $121,000 loss last year.