Judge tells Station Casinos, creditors to negotiate

Jan 27, 2010 11:42 PM

A federal bankruptcy judge is telling Station Casinos and unsecured creditors to hold negotiations over a $2.3 billion debt instead of enter into legal action.

U.S. Bankruptcy Judge Greg Zive on Monday withheld a ruling on the petition by the unsecured creditors to be allowed to sue over the arrangement of the 2007 leveraged buyout deal that took the casino company private.

An attorney for the creditors says they were left holding the bag while insiders got payouts in the $8.9 billion buyout by Colony Capital and the Fertitta family.

But a Station Casinos attorney says a lawsuit would hurt the chance of creating a plan for the company's reorganization and would cause irreparable harm to Station.

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