Station Casinos moved one step closer to emerging from bankruptcy intact Friday when a judge approved the sale of 11 casinos, land holdings and American Indian gaming contracts to a group backed by Fertitta Gaming for $772 million.
"Today's outcome means that Frank and Lorenzo Fertitta, the family that founded the company and grew Station Casinos into the most popular locals' casino company, will remain in control of all of our wholly-owned properties, our tribal gaming partnerships, and our land held for future development," Scott Nielson, executive vice president of Station Casinos, said in a statement.
"Everyone at Station Casinos is excited about this outcome and is ready to rededicate themselves to providing the friendly service, great value and overall entertainment experience that made Station Casinos the locals' favorite," Nielson said.
The transactions are expected to close early next year.
The locals gaming company filed for Chapter 11 bankruptcy protection a year ago with about $6 billion in debt.
Bankruptcy Judge Gregg Zive did not need to hold a planned auction Friday because the only other qualified bidder that submitted a letter of intent, Boyd Gaming Corp., dropped out of the auction last week, complaining that the auction process was tilted in favor of insiders. That left the Fertitta Gaming-backed bid as the only qualified one, according to court documents.
Zive's decision was made without any debate from creditors, most of whom have now agreed to Station Casinos' proposed two-part reorganization plan.
The first leg of the reorganization involved establishing a new holding company that would be owned by partner Colony Capital, secured lenders Deutsche Bank, JP Morgan and Fertitta Gaming, which was formed by Station Casinos founders Frank Fertitta III and his brother Lorenzo. The new company would take over casinos that provide more than half of Station Casinos' revenues: Red Rock Resort, Palace Station, Sunset Station, Boulder Station and the Wild Wild West and its adjoining 110 acres. The Fertittas will put up $85 million for their share of this company.
Friday's hearing was part of the second leg of the reorganization and gave the Fertitta Gaming group most of the rest of the company, including Texas Station, Santa Fe Station and the two Fiestas, certain land holdings and American Indian gaming contracts.
Unsecured creditors holding $2.8 billion in debt agreed to Station Casinos' reorganization plan last month after reaching an agreement to pay $100 million for as much as a 15 percent stake in the new company that will hold Red Rock Resort and the other four casinos.
Station Casinos attorney Paul Aronzon said Friday that Station Casinos has reached a tentative agreement with an independent group of unsecured lenders, too.
The sale and the other parts of the reorganization proposal still need to be approved by Zive at a hearing in Reno on Aug. 27.
Once the reorganization is confirmed, Nevada gaming regulators and the National Indian Gaming Commission then will have to confirm the new corporate ownership structure.
In addition to keeping the Fertittas involved in the company, Friday's sale means the Station Casinos name will remain in place on the local casinos because Fertitta Gaming will operate both sides of the reorganized company -- the casinos that were spun off into a new holding company and the casinos that were retained through the bankruptcy court auction process.
"Station Casinos has a lot of brand equity in the Las Vegas market," Nielson said. "We're going to keep it."
March Falcone, chief financial officer of Fertitta Gaming, said the company's focus will be on closing the two transactions.
"I wouldn't anticipate any changes in how the properties are managed," Falcone said. "There will be a new corporate structure."
Aliante Station and Green Valley Ranch Resort are not part of this bankruptcy case but will go through separate restructuring process, Nielsen said. The casinos are 50-50 joint ventures between Station Casinos and the Greenspun Corp., and were not including the bankruptcy filing.
Station Casinos did file Chapter 11 covering its subsidiary in Green Valley Ranch. The companies are still determining he best method to handle the financial restructuring of the two properties.
Contact reporter John G. Edwards at email@example.com or 702-383-0420.