Greektown files reorganization plan; lenders could get new stock

By Caroline Salls

Pittsburgh, June 2 - Greektown Holdings, LLC filed a plan of reorganization and related disclosure statement Monday with the U.S. Bankruptcy Court for the Eastern District of Michigan.

Under the plan, reorganized Greektown will issue new common stock to the company's pre-bankruptcy lenders.

However, Greektown said the plan proponents may continue to market its assets for sale and accept an alternate proposal up to two weeks before the plan confirmation hearing.

If an alternate proposal is accepted, the reorganized company will issue the new common stock in accordance with that agreement.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and other priority claims will recover 100% in cash;

• Holders of DIP lenders claims will receive a share of a new plan note;

• Holders of pre-bankruptcy lender claims will receive either a share of the new equity in the reorganized company or a share of an alternate proposal distribution;

• Holders of other secured claims will receive either the value of the claim or the return of the collateral securing the claim;

• Holders of bond claims against the holding company, general unsecured claims against the holding company, builders company, realty company and trappers company and the Monroe and Kewardin subsidiaries and interests will receive no distribution;

• Holders of general unsecured claims against Greektown's casino company will receive distributions from an unsecured distribution fund in two equal installments;

• Holders of trade claims against the casino company will receive two equal distributions from a trade claim distribution fund and a release from avoidance claims.

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

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