Hollywood Casino Shreveport's informal committee opposes U.S. trustee's efforts

By Jeff Pines

Washington, Nov. 18 - Hollywood Casino Shreveport's informal committee of non-bondholder creditors said the U.S. trustee's position on the U.S. bankruptcy code that the judge can order additional committees only after the U.S. trustee appoints an unsecured creditors' committee is wrong.

Last month judge Stephen Callaway ordered the trustee to appoint a non-bondholder unsecured creditors' committee in addition to an unsecured creditors' committee.

The informal committee's response was filed Thursday with the U.S. Bankruptcy Court for the Western District of Louisiana.

In paperwork previously filed with the court, the U.S. trustee argued that the judge must wait until the trustee's office appoints a committee before he or she can order the creation of other committees.

The trustee did not attend the weekend hearings which resulted in the judge's order and instead named an examiner other than David Rubin or William Greendyke, two nominees everyone at the hearings agreed to.

Further, a non-bondholder creditor committee is essential to protecting the interests of the non-bondholding creditors, the informal committee said, because their interests are "very divergent."

The bondholders, the committee noted, have been negotiating with the company for 18 months without the non-bondholding creditors.

Hollywood Casino Shreveport and the bondholders have negotiated a sale of the company to Eldorado Resorts LLC valued at $170 million and the no more than $2.5 million of the proceeds would go to the non-bondholding creditors, the committee said. "The non-holders believe that this proposal is unfair, unreasonable, unconfirmable, and would not obtain the approval of the Louisiana Gaming Control Board."

Creditors filed an involuntary Chapter 11 petition on Sept. 10. Last month, it was changed to a consensual order. The Fort Worth, Texas-based gaming company's Chapter 11 case number is 04-13259.

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