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Best of Howard Stutz

Gaming Guru

Howard Stutz

Station Casinos seeks control of Nevada casino

25 May 2011

LAS VEGAS, Nevada -- Station Casinos Inc. today will ask a bankruptcy court judge in Reno to sign off on its plan to take control of Green Valley Ranch Resort, Spa and Casino.

The Las Vegas-based gaming company last month filed a prepackaged Chapter 11 bankruptcy reorganization plan for Green Valley Ranch Resort and other joint ventures and subsidiaries as the company emerges from almost two years in bankruptcy.

Station Casinos has said the filings are needed to complete the overall restructuring in which lenders and members of Station Casinos' founding Fertitta family are acquiring most of the properties out of bankruptcy.

The new, postbankruptcy gaming company, Station Casinos LLC, will be owned by Deutsche Bank AG, JP Morgan, Fertitta Gaming and former bondholders.

The Nevada Gaming Control Board and Nevada Gaming Commission will hold back-to-back hearings Thursday on relicensing of Station Casinos executives, along with approving plans for the company's 18 properties.

Unsecured creditors of Green Valley Ranch Resort in Henderson, however, are challenging the sale. The unsecured creditors -- MFS Investment Management, Panton Capital Group and Babson Capital Management LLC -- believe the hotel-casino is worth more than $500 million sale price.

Station Casinos LLC, the company formed to buy most of the assets of the bankruptcy, in March announced a deal with lenders to buy Green Valley Ranch Resort.

In response, attorneys for Green Valley said the three second-lien, unsecured lenders are contractually prohibited from challenging the deal. If approved by federal Judge Gregg Zive, about $378 million in Green Valley debt would be extinguished.

It was unknown whether Zive would rule on the complaint filed by Green Valley's unsecured creditors or set another court date to rule on the motion.

As part of the bankruptcy, Aliante Station is being restructured via a debt-for-equity swap, with senior lenders -- TPG Capital and Apollo Management LLC -- receiving a combination of equity and secured debt. Station Casinos would continue to manage the property.

Station Casinos, which filed for bankruptcy protection in July 2009 owing almost $6 billion, won court approval of its restructuring plan in August. The company expects to emerge from bankruptcy in the second quarter of 2011. Chairman Frank Fertitta III and his brother Vice Chairman Lorenzo Fertitta are leading the restructured company with an expected debt of $2 billion.

According to Bloomberg News, at least $1.7 billion of the company's debt was the result of a leveraged buyout in November 2007 by Fertitta Colony Partners, which took the casino operator private.

The company, founded in 1976, employs 13,000 people.

Station Casinos on May 16 reported a smaller first-quarter loss than a year earlier as revenues generated at the company's 18 local casinos remained stable. Net revenues for the quarter ended March 31 were $247.7 million, down 0.6 percent from $249.3 million for the same period last year. In the first quarter, the gaming company lost $11.8 million compared with $53.5 million last year.
Station Casinos seeks control of Nevada casino is republished from