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Howard Stutz

Group plans bid for Station Casinos

20 April 2010

LAS VEGAS, Nevada -- Station Casinos' owners and some of its lenders plan to submit a $772 million opening bid to acquire a majority of the gaming company's assets in bankruptcy court through a newly formed company, according to a statement issued Monday by the gaming company.

The proposal, along with a restructuring plan submitted last month, both of which require bankruptcy court approval, would have the company emerging intact from bankruptcy by the end of the year.

Station Casinos executives have repeatedly said since filing for Chapter 11 in July that one of its goals was to keep the company whole.

In a court filing Monday, Station Casinos said it has reached an agreement with the committee representing 60 percent of the company's OpCo secured debt to make a stalking-horse bid for several properties, including Santa Fe Station, Texas Station, both the Fiestas, and Native American projects.

Locals gaming rival Boyd Gaming Corp., which offered $950 million for 14 casinos last year, and then $2.45 billion for the whole company in December, said Monday it is still interested in acquiring some or all of Station's assets.

"The press release issued today regarding the OpCo assets contained very little in the way of detail about Station's efforts to reorganize its debt, a process that has now been going on for more than a year," Boyd spokesman Rob Meyne said. "We remain interested in acquiring Station assets and look forward to reviewing the plan when it is made available to the rest of the creditors."

The stalking-horse bid would be made by the newly formed Fertitta Gaming, real estate firm Colony Capital from Los Angeles and banks Deutsche Bank and JP Morgan Chase.

Terms of the plan, including how much money the Fertittas would contribute, were not available by Monday evening.

The announcement comes less than a month after Station Casinos offered a reorganization plan that included the sale of OpCo's 13 casinos, land holdings and Indian gaming contracts as one entity.

Station Casinos is also proposing to spin off five of its larger properties into a new holding company that would be owned by both banks, Fertitta Gaming and Colony Capital of Los Angeles.

The five properties -- Red Rock Resort, Sunset Station, Boulder Station, Palace Station and Wild Wild West -- would be taken over by lenders who would sell a 46 percent stake to Fertitta Gaming for $85.6 million.

In both deals, Fertitta Gaming would operate the casinos under long-term management contracts that would pay the company 2 percent of the properties' revenues and 5 percent of the properties' cash flow.

Station Casinos said Monday that both plans have the support of holders of 90 percent of the company's secured debtors, which is $3.1 billion of the company's nearly $6 billion in long-term debt.

A hearing on the joint plan is scheduled for May 4 in Reno.

"This agreement is another important step toward maximizing the value of all of the Station Casinos' properties for the benefit of our team members, guests, lenders and the Las Vegas community," Station Casinos Chairman and Chief Executive Officer Frank Fertitta II said in a statement.

Colony Capital and Deutsche Bank declined comment.

A call and e-mail to an attorney for the official committee of unsecured creditors in the case was not returned.

Monday's filing did not explain if the OpCo bid would include the company's joint ventures with the Greenspun Corp.

Various Station Casinos' subsidiaries own 50 percent and manage Green Valley Ranch Resort and Aliante Station, as well as three smaller casinos, in partnership with Greenspun Corp.

A Station Casinos affiliate, GV Ranch Station, filed for bankruptcy in early February as part of the gaming company's planned reorganization.

However, a Greenspun affiliate filed a motion in bankruptcy court Feb. 18 asking that the joint-venture partnership be held out of the bankruptcy so the Greenspuns could sue Station Casinos.

Greenspun alleges Station Casinos executives breached their fiduciary responsibilities to the resort, in part, by directing high-stakes gamblers at Green Valley Ranch to other casinos that were owned solely by Station Casinos.

A hearing scheduled on the Greenspun matter is scheduled for June 4 in Reno.
Group plans bid for Station Casinos is republished from