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John G. Edwards

Hooters Hotel owner says it may not survive

2 April 2010

LAS VEGAS, Nevada -- The owner of Hooters Casino Hotel says it may go bust, and three other Southern Nevada casino operators also reported financial weakness this week.

Hooters Hotel owner 155 East Tropicana LLC on Wednesday reported "substantial doubt about our ability to continue as a going concern."

The company said it has recurring operating losses and an accumulated deficit.

In a report to the Securities and Exchange Commission, 155 East Tropicana LLC said it is unable to give any assurance that it will make profits, maintain current financing or get forbearance from noteholders.

The company missed interest payments in April 2009 and October 2009. It has used all of its credit line and is relying on cash flow for expenses.

The company lost $3.8 million in the quarter ended Dec. 31, down from a loss of $8.2 million a year earlier. Quarterly revenues fell 16.5 percent to $11.1 million from $13.3 million.

For the year, the company lost $18.2 million, up from $13.3 million in 2008. Operating revenues dropped to $46.8 million from $60.1 million in the previous year, a 22.1 percent dip. The 696-room property employed 720 at the end of last year.

Herbst Gaming Inc. also reported results Wednesday, saying it lost $60.1 million last year, compared with a $209.4 million loss in the prior year.

A bankruptcy judge in January confirmed a Chapter 11 plan of reorganization for Herbst Gaming Inc., which operates slot routes and 15 casinos including Terrible's on Paradise Road in Las Vegas. It employed 5,650 workers at year's end.

In the fourth quarter, Herbst lost $97.8 million, up from $26.7 million in the third quarter. Revenues totaled $47 million in the fourth quarter, about the same as in the third quarter.

Carl Icahn's Tropicana Entertainment Inc. Thursday reported an operating loss for its Laughlin properties of $4.2 million for 2009, compared with an operating income of $4 million in the prior year. The company's revenues in Laughlin declined 15.2 percent to $104.2 million for the year from $122.9 million in the previous year. It operates the Tropicana Express and River Palms hotel-casinos in Laughlin.

Also, Colony Resorts LVH Acquisitions, which owns and operates the Las Vegas Hilton, lost $8.2 million in the fourth quarter, compared with a $4.3 million loss a year ago, the company reported. For the year, the company lost $28.9 million, compared with a loss of $437,000 in the prior year.

John G. Edwards
John G. Edwards