Tuesday, April 21, 2009 | 9:06 a.m.
Sun Coverage
The owner of a casino-entertainment complex in Canada and card rooms in Washington state filed for bankruptcy protection last week after defaulting on a loan.
Evergreen Gaming Corp. of Vancouver, British Columbia, and subsidiaries including Washington Gaming Inc. of Renton, Wash., sought protection simultaneously in bankruptcy courts in Vancouver and Seattle. The companies said they employ about 1,600 people.
Court papers show the Canadian court appointed Deloitte & Touche Inc. to monitor and help facilitate the restructuring.
Evergreen said the filing came after it and its subsidiaries defaulted on a $29 million loan from Fortress Credit Corp. of New York and other lenders. Some $30.1 million is now due on the secured loan, which was issued in 2007, court records show.
The loan financed Evergreen's acquisition of FSSD Holdings, parent company of Frank Sisson's Silver Dollar Casino and Entertainment Centre in Calgary, Alberta. Evergreen paid $22 million plus stock warrants for the Silver Dollar, which had 504 slot machines, 25 video lottery terminals, 20 gaming tables, a 38-lane bowling alley, a 1,200-seat entertainment and convention center and various food and beverage outlets.
Evergreen last reported financial results for the third quarter of 2008, saying it lost $1.4 million on revenue of $12.7 million vs. a profit of $90,000 and revenue of $12 million in the third quarter of 2007.
In the 2008 quarter, it said revenue in its 10 Washington card rooms in the Seattle and Puget Sound area, such as the Golden Nugget Casino in Tukwila, declined by $854,000 compared to the third quarter of 2007 and that it sustained another loss of revenue totaling $237,000 because of the closure of two nightclubs.
"Management believes the reduction in revenue is due to factors in the U.S. economy at large and does not represent a long-term change in our market position or expected future results. The region in which (Washington Gaming) operates has experienced an economic downturn and our revenue shortfall is a reflection of reduced spending by individuals throughout the economy,'' Evergreen said last fall.
In announcing the bankruptcies on Friday, Evergreen said the bankruptcy court gave it protection from creditors at least until May 15.
"While under ... protection, creditors and others are stayed from enforcing any rights against the companies, to provide time to enable the companies to restructure their affairs,'' Evergreen said. "The filing also permits the companies' operations to continue in the normal course, while a business restructuring to address debt levels is developed. The implications for creditors of and other stakeholders in the companies will not be known until the terms of the restructuring plan have been determined and the restructuring process is complete.''
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