Station Casinos Inc. is closer to emerging from bankruptcy after a judge on Wednesday approved reorganization plans for most of the Las Vegas company’s subsidiaries.
Bankruptcy Judge Gregg Zive in Reno approved plans that have been previously disclosed in which members of the founding Fertitta family, their lenders and co-investors will maintain control of most of the company.
Aliante Station will be spun off to holders of some $378 million in debt under the plan approved Wednesday, though it will continue to be managed by Station.
The bankruptcy reorganization plan for Green Valley Ranch Resort in Henderson is now expected to be approved June 8 after Zive deals with last-minute objections by certain lenders, Station spokeswoman Lori Nelson said.
Those objecting lenders were removed from the unsecured creditors committee Wednesday for lack of standing by Zive, meaning there is no committee, Nelson said. Station Casinos LLC plans to buy Green Valley Ranch out of bankruptcy for $500 million.
Licensing hearings are set before the State Gaming Control board and the Nevada Gaming Commission for Thursday for the company emerging from bankruptcy, Station Casinos LLC, and key executives.
“We are excited to have received the final approval from the court for the restructuring of substantially all of Station Casinos. It has taken a great deal of hard work and the personal financial commitment of Frank and Lorenzo Fertitta and their partners to keep the family of Station Casinos’ properties together and our team members employed. We look forward to appearing before the Nevada Gaming Control Board and Gaming Commission tomorrow and, subject to their approval, closing the restructuring transactions in the coming weeks,” Richard Haskins, executive vice president and general counsel for Station Casinos Inc., said in a statement.
With business picking up in the Las Vegas Valley, Station on May 16 posted a smaller first quarter loss.
Net revenue of $247.7 million in the quarter ended March 31 was off just slightly from $249.4 million in the year-ago quarter. The loss of $11.8 million compared to a loss a year earlier of $53.5 million.
Unable to meet debt obligations, Station filed for bankruptcy reorganization in July 2009.
It’s emerging from bankruptcy under a two-step process in which key lenders Deutsche Bank and JPMorgan Chase, owed $2.475 billion, essentially foreclosed on the company’s most important properties: Palace Station, Boulder Station, Sunset Station and Red Rock Resort. The Fertittas, as investors, maintained an equity interest in those properties as well as management interests.
In the second step, the Fertittas and their lenders were the successful bidder for 11 more gaming properties — not including Aliante and Green Valley Ranch — for $772 million.
During the bankruptcy, Station overcame objections from unsecured bondholders owed $2.8 billion who will see their debt canceled. They complained the $8.8 billion 2007 deal in which Station was taken private by the Fertittas and Los Angeles investment house Colony Capital resulted in the company being over-leveraged and billions of dollars of losses sustained by the bondholders and certain lenders.
Station argued it couldn’t have foreseen the deep recession that slashed revenue at its locals properties.
Certain of the settling bondholders, signaling confidence in Station’s long-term prospects, agreed to invest up to $100 million for a 15 percent stake in part of Station
In its latest financial report, Station said it had $6.86 billion in debt and liabilities — $6 billion being subject to compromise in the bankruptcy case.
The Greenspun family, owner of the Las Vegas Sun and VEGAS INC, is Station’s partner in Aliante Station and Green Valley Ranch.