Station Casinos: Break-Up Plan Includes Sale Of Most Properties

Mar 25, 2010 3:54 PM

Station Casinos announced this morning it will today file a reorganization plan with the U.S. Bankruptcy Court in Reno that calls for the sale of all of its properties except four "core" resorts in Las Vegas.

Under the joint plan of reorganization under Chapter 11 of the Bankruptcy Code, Station would retain control over four major properties: Red Rock Casino Resort, Palace Station, Boulder Station and Sunset Station.

Station would sell its remaining properties, under the supervision of the Bankruptcy Court. According to a statement released by Station Casinos early this morning, it’s unclear whether the properties would be sold as a block or piecemeal. The properties include:

• Santa Fe Station

• Fiesta Rancho

• Fiesta Henderson

• Texas Station

• Aliante Station

• Wildfire Rancho

• Wildfire Boulder

• Wild Wild West

• Barley’s Casino

• Gold Rush Casino

• Lake Mead Casino

• The Greens and Wildfire Lanes

• Green Valley Ranch Station (50% interest)

The company said that it anticipates that the plan will be confirmed by the Bankruptcy Court later this summer, subject to regulatory approvals, and that the debtors will emerge from bankruptcy before the end of the year.

"Reaching a deal on the Propco Properties marks a significant step toward the restructuring of Station Casinos," said Frank Fertitta III, chairman of the board and chief executive officer of Station Casinos. "I’m committed to the successful reorganization of the company that my family founded."

The "Propco Properties" include the aforementioned four "core" gaming resorts. As part of the reorganization plan, the mortgage lenders to the Propco Properties will become equity owners of a newly-formed company that will sell 46% of the equity to Frank Fertitta III and his brother, Lorenzo Fertitta, who will make a "significant" new investment to purchase their equity in the new company.

The remaining equity will be owned primarily by the Propco lenders and Colony Captial, who will also be making a new investment in the company.

Fertitta Gaming, an entity owned by the Fertittas, will also manage the Propco Properties under a long-term management agreement.

The plan and the disclosure statement have not yet been approved by the Bankruptcy Court and are subject to further negotiations with stakeholders, Station said in its release.

As a result, the plan may be materially modified before approval.

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