Icahn, Becker alter plans for Arizona Charlie's

Arizona Charlie's debtholders will have three financial re-structuring plans to consider following a hearing last week in U.S. Bankruptcy Court.

Current Arizona Charlie's owners and potential owners expressed confidence their plans would prevail.

"We're just taking the position that we're going to get the property," said Arizona Charlie's Chief Executive Bruce Becker. "We're going to have the highest bid at the end of the day."

But Carl Ichan, whose High River L.P. owns 51.3 percent of the resort's mortgage debt, is also pursuing the 258-room hotel-casino as is Station Casinos.

Station's offer for the property remained at $52 million. However, both Ichan's company and Becker Gaming, owner of Arizona Charlie's, offered amended proposals that appear to make Becker the high bidder.

Becker proposed to offer secured debtholders two choices. The first was an initial $43 million payment in cash, about the value of the property's collateral, plus a later payment of $19 million.

"That has the effect of eliminating liens," said Becker Gaming's attorney John Clemency.

Becker Gaming is offering a second option to debtholders that would be a one-time prorated $55 million offer to debtholders.

The company's previous offer was for between $44.9 million and $64 million of the company's $55 million debt, depending on whether note holders were paid in cash or over a period of time.

High River L.P. also altered its proposal, rescinding its plan to offer debtholders 90 percent equity and instead offering a payment of $52 million to note holders, paid in proportion to how much debt a noteholder owns.

That move was made to simplify the company's ability to obtain a gaming license. The private company's shareholders could have been subject to gaming license requirements, lawyers said.

"We wouldn't want to run the risk that anyone who took the stock would have to spend money on licensing," said High River attorney Edward Weisfelner.

If Ichan's plan is approved, a gaming-licensed trustee would be appointed to run the casino under a rental agreement until the company is licensed.

During Friday's often contentious hearing, each plan was criticized by competitors. Weisfelner criticized Becker Gaming's plan, saying it would require further financing for the company to implement it.

And Station's and High River's proposals were criticized because they could hinge on the companies' ability to resolve leasing problems for the parking lot and land on which the hotel-casino sits and on Ichan getting a gaming license.

Member's of the Becker family hold those leases. Paul Aronzon, attorney for Station Casinos, said that company's proposal was conditional on resolving real estate leases.

"If we don't get the real estate resolved, we're not doing this deal," Aronzon said.

Not so for Ichan and High River, whose attorney said if their plan is approved and they didn't get lease agreements for parking, they would shut the casino down and litigate until one is agreed upon.

"High River has the financial wherewithal to shut down," Weisfelner said.

Weisfelner said he didn't think that would actually happen, but Becker wasn't intimidated.

"That's definitely a problem for them. If Ichan asked me to negotiate today, I wouldn't negotiate," Becker said.

Bankruptcy Judge Linda Riegle approved three plans to be considered by debtholders. Ballots could be mailed this week and confirmation hearings are set for June. Both votes and the validity of the plans will be considered in which one is ultimately approved.

Arizona Charlie's filed for bankruptcy last November. The filing stemmed from Becker Gaming's inability to sell to to get a license for its Missouri riverboat, the Capitol Queen. Becker Gaming had guaranteed about $20 million in Capitol Queen notes and filed bankruptcy so it would have standing to contest the validity of those claims.

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