No Dice for Major Las Vegas Gaming Company
The Riviera Holdings Corporation has recently filed for bankruptcy protection. A pre-negotiated deal will pass on ownership of the company to senior, secured lenders. Riviera Holdings is the owner of the Riviera Hotel & Casino in Las Vegas on its infamous Strip. Just about five years ago, the company had approximately $200 million in annual revenues and employed 1,600.
There was nothing new in the court papers: the large gaming company, like so many other casinos in Las Vegas, has felt the effects of a weak economy. Visitor traffic is next to nil in the Riviera, as their presence on the Strip fades along with the others. “The effects of such nearby vacant lots and uncompleted projects have been considerable. Although Riviera Las Vegas has fewer neighboring competitors, there are also fewer reasons for customers to venture to the north end of the Strip,” Riviera Holdings said.
“There will be no effect on our employees, vendors, and most importantly, our customers,” said the general counsel to Riviera, Tullio Marchionne. The company also owns the Riviera Black Hawk Casino in Black Hawk, Colorado. “By agreeing with our secured lenders in advance, we will be able to proceed with an expeditious restructuring through bankruptcy which will provide us with a viable capital structure, as well as additional financing.”
The reorganization plan on the table presently is backed, and approved thus far, by a vast majority of senior secured lenders—all holding claims under the umbrella of Riviera’s $228 million credit agreement.
Owner and Executive Chairman William Westerman passed away on April 21st, at the age of 78. He held the roles of Chairman and Chief Executive Officer of the company and its predecessor, since 1992. In their Chapter 11 petition, Riviera listed both assets and liabilities in the $100 million to $500 million range.