Reno Bankruptcy Judge OKs Station Casinos Auction
Reno Bankruptcy Judge, Greeg Zive, recently approved a plan to auction 11 Station Casinos. Judge Zive went on to say he would supervise the sale on August 6th, 2010. The plan entails placing Red Rock Resort, Palaze Station, Sunset Station, Wild Wild West and Boulder Station properties in a holding company run by company lenders, Colony Capital and various members of the casino’s founding family. The holding company would then auction the 11 leftover casinos, land holdings and Native American casino contracts—all as one entity with a starting bid of $772 million.
Judge Zive said Station and its debt holders should continue to discuss ways to maximize the company’s overall value. The company itself has a debt of nearly $6 billion.
“There would be legal issues and questions at every step of that separation, all of which most probably involve…a great deal of fees, costs and expenses,” said the judge.
The ruling also calls for bidders to submit letters of intent no later than July 1st and bids by July 30th. All bids must be at least $17.5 million greater than the founding family’s opening bid. The ruling came on the heels of a 10-hour hearing. If another company steps in and purchases the properties, thousands of employees stand to lose their jobs; however, Zive pointed out those interested in bidding would most likely keep employees at the properties.
If bankruptcy reorganization fails, it could mean more danger for Station. “There is little doubt such a division, if it were to occur in the absence of a rational and comprehensive business approach, could create economic disaster for many parties,” Judge Zive said.Post Tags: