Station proposes asset sale

Station Casinos is asking a federal bankruptcy court to set a 45-day qualification period for potential buyers seeking to acquire a portion of the locals gaming giant.

In one of two filings Thursday with the U.S. Bankruptcy Court in Reno, Station Casinos is asking a judge to sell some 13 casinos, land holdings and Indian gaming contracts as one entity because the company believes it would fetch a larger price that way.

Station Casinos, which proposed a reorganization plan with the court last month, said it hopes to complete the sale of its casinos before hearings on July 15-16.

In a separate filing, the company asked the judge to further extend the exclusivity period by 60 days where Station Casinos alone can propose a reorganization plan.

If the Station plan is approved, competing proposals from creditors and other parties would not be considered by the court. The exclusivity period would run from mid-May to mid-July and coincide with the proposed sale process.

The company is asking that its motion for establishing bidding procedures and deadlines and the exclusivity period extension be heard May 5.

Last month, Station Casinos proposed spinning off five of its larger properties under a new holding company that would be owned by its lender, brothers Frank Fertitta III and Lorenzo Fertitta and real estate investment firm Colony Capital of Los Angeles.

The remaining properties would be sold by the court to satisfy bondholders and other lenders. The Fertitta brothers have said they plan to bid on those properties.

The bidding is expected to attract other gaming companies. Last year, Boyd Gaming Corp. submitted two offers to buy all or a portion of Station. Both offers were rejected.

Station filed for Chapter 11 bankruptcy protection in July with about $5.6 billion in debt.

The five properties to be retained are Red Rock Resort, Sunset Station, Boulder Station, Palace Station and the Wild Wild West. The casinos are encumbered by some $2.475 billion in debt.

Under the plan, the debt would be reduced to $1.6 billion and the Fertitta brothers would pay $85.6 million to take a 46 percent ownership stake in the new entity through their newly created Fertitta Gaming.

Fertitta Gaming would operate the casinos under a 25-year management contract that would pay the company 2 percent of the properties' revenues and 5 percent of the properties' cash flow.

In its filings, Station Casinos called the transfer of the five properties a foreclosure by the lenders.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.