Friday, May 28, 2010 | 2:53 p.m.
- Judge deals blow to Culinary Union effort in Station Casinos bankruptcy case (5-27-2010)
- New objections filed to Station Casinos bankruptcy plan (5-25-2010)
- Station Casinos loses $53.5 million in first quarter (5-17-2010)
- Station Casinos: No competitive advantage under bankruptcy plan (4-29-2010)
- Station Casinos: Boyd Gaming meddling in bankruptcy case (4-28-2010)
- Boyd Gaming objects to Station Casinos reorganization plan (4-22-2010)
- Union-backed group critical of Station reorganization plan (4-21-2010)
- Creditors attack Station Casinos bankruptcy plan (4-21-2010)
- Key lenders agree to Station Casinos reorganization plan (4-19-2010)
- Station Casinos asks judge for extension in bankruptcy case (4-8-2010)
RENO – A federal bankruptcy judge has approved plans by Station Casinos to auction off 11 of its gambling properties to satisfy some creditors.
Judge Gregg Zive ruled Friday that July 30 is the deadline for bids. The auction will be Aug. 6.
The decision was a setback for groups of creditors who wanted the judge to set aside the auction plan on grounds it wouldn’t produce enough money to satisfy some of the minority lenders and unsecured bondholders. Independent lenders are owed $224 million and bondholders are owed $2.5 billion.
Bonnie Steingart, a New York lawyer, said the committee of creditors could consider an appeal.
Station Casinos filed for Chapter 11 bankruptcy protection last July, listing $5.9 billion in debt. It developed a plan it believes can put it back on its feet.
It calls for the major creditors of Station – Deutsche Bank and JP Morgan Chase – to join with casino operators Frank and Lorenzo Fertitta to hold on to five of the company’s largest hotel-casinos: Red Rock Resort in Summerlin, Sunset Station in Henderson and Boulder Station, Palace Station and the Wild Wild West in Las Vegas.
The group, together with Colony Capital of Los Angeles, would submit a “stalking horse” bid of $722 million for 11 of the casinos, including the two Fiestas, Texas Station and Santa Fe Station.
The judge called the $722 million bid “an adequate floor to commence the auction.”
The auction, however, doesn’t complete the process, said the judge. He said he still must approve the bankruptcy reorganization plan.
He warned lawyers on both sides they must show good faith in the sell-off plan.
“I reserve the right to revise any of the matters, and I will” if good faith is not displayed, Zive said.
The potential bidders have until June 30 to submit a letter of interest. Bidders must submit a proposal $17.5 million higher than the $722 million “stalking horse” bid.
The judge approved a plan on how to separate the company into two.
Station Casinos now has 18 gaming locations, but two of them are not in the auction -- Green Valley Ranch resort and Aliante Station are joint ventures with the Greenspun family, owner of the Las Vegas Sun.
Land holdings in Nevada and California would be divided between the groups.
Deutsche Bank and JP Morgan Chase weren’t interested in running all 18 casinos. The judge said just spliting the two companies would have “dire economic consequences.” Zive heard a full day of testimony Thursday that ended at 8 p.m.
A spokesman for Deutsch Bank told the judge that the secured creditors hold 60 percent of the bank debt. These creditors back the reorganization plan.
The judge found that the committee of creditors didn’t have “a significant role” in drawing up the bankruptcy plan. Attorneys for the creditors said they weren’t consulted on the division of assets and the price in the auction.
Mentioned as potential bidders are Boyd Gaming Corp, Ameristar Casinos, Penn National Gaming, Cannery Casino Resorts and the Palms.