Tuesday, July 28, 2009

Uh Oh, Station Casinos Goes Chapter 11

That is, Station is going bankrupt. However, they insist it will only be "reorganization" and it won't affect employees or gamblers.

Station officials today said the company's casino operating subsidiaries did not file for bankruptcy and that the company will continue normal operations at all of its properties under the direction of its existing management. In addition to cash generated from its operating subsidiaries and affiliates, the company has in place an agreement with its senior secured lenders that, subject to court approval, permits it to borrow, as needed, up to $150 million of cash from one of its non-operating subsidiaries. [...]

"All of our casinos will continue to operate as usual and we will continue to provide our guests with the same great value and entertainment choices they have always enjoyed at our properties," said Kevin Kelley, chief operating officer of Station Casinos. "From our loose slots, to honoring points earned in our Boarding Pass program, to our great promotions and contests ... it’s business as usual at Station Casinos."

Because of reductions in cash flow tied to the recession, the company is having difficulty serving its debt load of $5.74 billion and in February started negotiating with key bondholders regarding a proposed prepackaged bankruptcy filing in which bondholders would have made concessions and Station's owners, the Fertitta family and Colony Capital, would invest another $244 million in the company and remain in control of Station.

So for now, I guess I won't have to worry about the points I earn at Green Valley Ranch or my friend who works at Sunset Station. However, we'll probably need to keep a close eye on this one. Bondholders and others have been pressuring the Fertitta family for quite a while to sell some or all Station properties to Boyd Gaming. One bondholder even tried suing Station executives over possible debt restructuring. I don't know how likely it is that the Fertittas will keep their hold on this company, but I guess this is their last chance to keep the company in their family.

Hopefully whatever comes out of bankruptcy, it won't cause any more pain to Greater Las Vegas.

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