Greektown reaches deal with bank lenders to amend reorganization plan

New York, Nov. 30 - Greektown Holdings, LLC said that holders of a majority of the principal amount of its pre-bankruptcy bank debt have reached agreement on amendments under which they will support the plan of reorganization filed on Nov. 2.

Under the proposed amended plan, the bank lenders will be paid in full in cash on the effective date of the plan.

Holders of the company's 10¾% senior notes due 2013 will receive the reorganized company's equity, subject to dilution by a rights offering. Noteholders will have the right to subscribe for 78% of the equity at a total purchase price of $185 million in the rights offering.

MFC Global Investment Management, OppenheimerFunds, Inc., Brigade Capital Management and Solus Alternative Asset Management LP, the four plan sponsors, have agreed to backstop the rights offering. Solus will also make a direct investment in the company's equity.

The plan sponsors and the ad hoc group made up of some of the pre-petition bank lenders, led by Standard General and Caspian Capital Advisors, will invest in $385 million of new secured notes of the company.

With the entire debt and equity package fully committed, and with the support of the creditor constituents, the plan sponsors anticipate that the new plan should be expeditiously confirmed without the need for further litigation, the company said in a news release.

"We believe our proposal is beneficial for both the city of Detroit and the state of Michigan," said Arthur Calavritinos, vice president with MFC Global Investment Management, which is the largest holder of the senior unsecured notes, in a news release.

"The largest lenders to Greektown agreed that a consensual approach was most beneficial to the estate," added Soo Kim of Standard General. "We were able to achieve a good outcome for the pre-petition lenders, support the bondholders in their plan of reorganization and most importantly, minimize the disruption and uncertainty that would come from a long and drawn out legal dispute."

Greektown, a Detroit casino operator, filed for bankruptcy on May 29, 2008. Its Chapter 11 case number is 08-53104.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.