Monday, November 23, 2009

Culinary 226 Goes After Station Casinos in Bankruptcy Court

Oh, my! And the plot thickens...

The Culinary Union heightened the drama in its fight with Station Casinos last week, blaming a management-led buyout for the company’s bankruptcy filing and aligning itself with the company’s creditors.

The union issued a detailed report on the company’s financial woes, arguing that Station could have avoided bankruptcy had it not pursued a $5.7 billion deal to take the company private in 2007. It concluded with a call for creditors to demand that Station’s owners reinvest a significant part of the profits from the deal to help the company recover.

The move is the latest chapter in the Culinary’s ongoing battle to organize the 13,000 workers of the nonunion casino giant, and piggybacks on a lawsuit filed by a group of aggrieved creditors that claim the company relied on unrealistic, rosy financial assumptions. [...]

Among the union’s findings: Company insiders, led by the Fertitta family, nearly tripled Station’s long-term debt from 2005 to 2007, borrowing money to buy back 14 million shares and complete the buyout. Forty percent of the proceeds — more than $660 million — went to company insiders. The Fertittas alone received $495 million.

“Clearly, the owner-managers and other insiders were more interested in extracting wealth from the company for themselves than ensuring its and its employees’ future,” said D. Taylor, Culinary secretary-treasurer. “Now it’s time for them to give back.”

Well, the Fertittas had it coming. They negotiated that generous (to them) buyout loaded with stock options and other goodies. They kept taking on more and more debt, even though they must have known at some point that they couldn't afford any more debt.

But now they say they have to fire employees? And for the workers staying at Station, they'll have less pay and fewer benefits? Oh, and the workers still aren't allowed to organize?

Bullsh*t.

The Fertittas brought this upon themselves. It's their fault they're in bankruptcy court now, not Culinary's. Maybe if they had run better this company they inherited from their father, they wouldn't be at risk of losing it all in court today.

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