U.S. Bankruptcy Court Judge Bruce Markell approved Black Gaming’s reorganization plan Monday, setting the stage for the Mesquite casino operator to emerge from bankruptcy this year.
“We are extremely pleased with the court’s decision, which clears the way for us to complete our debt restructuring,” said Black Gaming founder Randy Black Sr., who will be a director and CEO of the reorganized company.
The restructuring plan will need to be approved by Nevada gaming regulators before it can be completed.
Black owned 99 percent of the company and was chairman and CEO when Black Gaming filed bankruptcy in March.
Under the plan, however, Black will be part of an ownership group that will include Black Gaming executive Anthony Toti, Texas-based Newport Global Advisors and parties designated by South Point owner Michael Gaughan.
The group will invest $18.25 million cash in the restructured company. The partnership will own 100 percent of the company, although court filings do not describe how much each party will contribute and own.
Gaughan will control the largest share of the new ownership group, Black Gaming attorney Greg Garman said.
Gaughan did not return an inquiry for comment.
Longtime Gaughan business partner Frank Toti will be the new company chairman, according to court documents filed Monday.
Toti’s son, Anthony Toti, will continue as chief operating officer and a director. Anthony Toti, who worked for Gaughan when the Suncoast opened in 2000, joined Black Gaming as chief operating officer in December 2008.
Gaughan’s South Point casino will continue to operate Black Gaming’s race and sports books. It took over the sports book in 2008.
Investment firm Newport Global Advisors will control two board positions of Black Gaming.
According to court filings, senior note holders will exchange their current debt for $62.5 million in new senior secured loans, reducing the company’s debt by $143 million.
Unsecured creditors holding nearly $1 million in claims will be paid in full, Garman said.
Black Gaming reached a reorganization agreement with approximately 80 percent of its lenders before filing bankruptcy.
The final plan filed in May received 98 percent approval of secured creditors. One “no” vote came from an unidentified note holder.
The plan allows Black Gaming to work with a more manageable debt load, Black said.
“Many other gaming companies who have found themselves in similar situations to that of Black Gaming continue to work toward what we have achieved today,” Black said in a statement.
Black Gaming owns and operates the Virgin River and CasaBlanca hotel-casinos in the city 80 miles northeast of Las Vegas on Interstate 15.
The company announced plans this month to discontinue operation of 16 slot machines at the Oasis and to demolish much of the property.
Black Gaming is seeking approval of its Oasis plan from the city of Mesquite and state gaming regulators.
Contact reporter Arnold M. Knightly at email@example.com