Station Casinos filed for Chapter 11 yesterday. This day has seemingly been around the corner for a while now and it was only a matter of time for this to happen. Chapter 11 doesn’t mean that a company will shut down. Rather, it gives a business time to recover from their economic struggles with government protection.
Bill Lerner, an analyst for Union Gaming in Las Vegas, said the bankruptcy filing will give Station more time to negotiate with lenders. Under bankruptcy law, Station likely will have several months to exclusively propose a plan of reorganization.
The real question is what Station Casinos will look like if it makes it through chapter 11. Odds are that it will become a little more streamlined as they sell off some assets to pay off debt.
Lerner said he is sure Las Vegas-based Boyd Gaming Corp. will seek some of the assets during the bankruptcy process, and said he wouldn’t be surprised if Penn National Gaming — which is interested in expanding to Las Vegas — also takes a look at the assets.
I’m obviously not a Las Vegas local but I have a soft spot for the locals casinos. I like the option they provide for the local consumer and for me when I travel in. The Gold Coast is almost always a stop for me when I visit Las Vegas. Competition is always good for the customer. Whether Station keeps all of their casinos or they sell some to Boyd I hope the competition lives with good management and good service for all.
Last night Las Vegas’ mostly locals casino chain, Station Casinos, announced that they were given an extension on their deadline to file for bankruptcy by their lenders. The extension is for 30 days and doesn’t mean that Station Casinos is in the clear just yet.
The May 15 deadline gives holders of $2.3 billion in bonds more time to consider Station Casinos’ offer to buy back investors’ bonds and exchange them with new, discounted notes with extended maturity dates, potentially reducing the company’s debt by $1.7 billion.
The extension postpones a Chapter 11 bankruptcy filing by Station, which anticipates filing for bankruptcy protection regardless of whether bondholders approve the exchange.
Filing for Chapter 11 isn’t always the death of a business. In this case it could allow Station Casinos the ability to restructure, pay off debt and stay in business.
As I’ve mentioned before, I like Station Casinos and think there is a place in the market for them. I, almost always, make it a point to stop off at the Gold Coast. I have plans on doing that again on my next trip. The Gold Coast was on of the places where I honed my gambling chops and I hope things stay in tact.
It has been a rumor for a while that Station Casinos would either sell some or all of the company or file for bankruptcy protection. Much like most rumors in the casino business this one is now true. Station Casinos will file for bankruptcy protection by April 15.
Station had its attorneys file court papers Monday opposing a motion for a court injunction sought by a bondholder who is seeking to block the debt-exchange, a key part of Station’s plan to file a pre-packaged bankruptcy petition that would keep its business operating and includes a cash infusion of $244 million by Station owners the Fertitta family and Colony Capital.
Boyd Gaming is still moving aggressively to buy Station Casinos, but they’ve not been able to get that done.
“Station employs over 13,000 people and plays an important social and economic role in the local community. There is no reason to needlessly jeopardize the economic health of this company and its various constituencies so that a single bondholder can pursue spurious claims outside of the established restructuring process.”
It will be interesting to see how this plays out. I really like Station Casinos because of their local flavor. They’re always a nice change of pace from the strip casinos. Nothing will effect my next trip to Las Vegas and I hope Station is able to fight through this. This kind of feel like a fight for the little guy. Go little guy!