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Arnold M. Knightly

Station Casinos seeking to hold off case

6 October 2009

LAS VEGAS, Nevada -- Station Casinos will ask a bankruptcy judge in Reno today to uphold an automatic stay on a lawsuit filed by former employees seeking unpaid wages until after the company emerges from bankruptcy.

Judge Gregg Zive will hear arguments at 10 a.m. on whether to lift the stay on the lawsuit filed July 21.

The lawsuit, which is seeking class action status for as many a 20,000 current and former employees, was filed a week before Station Casinos filed for Chapter 11 bankruptcy protection on July 28.

Three former workers filed a motion Sept. 9, agruing that the gaming company would not suffer any great financial harm if their lawsuit was allowed to proceed in state district court.

Station Casinos, however, is arguing that the company "is entitled to the breathing room provided by the automatic stay to allow it to focus on reorganization," according to a Sept. 24 bankruptcy court filing.

"(Station Casinos) will certainly have a confirmed (bankruptcy) plan long before discovery and pretrial practice is completed in the state court," Station's filing said. "If the stay is lifted, the debtor will be dragged into litigation that will cost the bankruptcy estate several million dollars."

In their lawsuit, the former workers allege Station Casinos does not pay its workers properly because of a rounding system used to pay hourly workers at the company's 12 properties. The lawsuit claims Station Casinos rounds off employees' starting and ending times to the detriment of its employees.

The workers' attorneys said in the motion that bankruptcy judges can lift automatic stays on a case-by-case basis "when no great prejudice to the bankruptcy estate would result."

The lawsuit was originally filed in U.S. District Court in Nevada in February 2008. The federal court dismissed the case and it was refiled in state district court.

Luanne Sacks, attorney for Station, said the wage case could take three to four years to come to trial and cost the company more than $3 million if it is allowed to proceed while the company is in bankruptcy.