HWCC asks court to order Hollywood Casino Shreveport to decide on management agreement

By Caroline Salls

Pittsburgh, June 3 - HWCC-Shreveport, Inc. asked that Hollywood Casino Shreveport be ordered to accept or reject its management agreement, according to a Thursday filing with the U.S. Bankruptcy Court for the Western District of Louisiana.

HWCC said it has been operating the casino since it opened. Because of Hollywood Casino Shreveport's default on its 13% first-mortgage and senior secured notes, HWCC is owed in excess of $10 million in management fees under the agreement.

HWCC said the casino's plan of reorganization allows the management agreement to "ride through" the Chapter 11 proceedings neither assumed nor rejected and thereby keeping HWCC in management without payment.

According to the filing, the management agreement, which is still subject to court approval, provides "a feasible mechanism for a smooth transition from the operation by HWCC of a Hollywood Casino to the ownership and operation of the complex by Eldorado Resorts, LLC under its own brand."

HWCC said the ride through provision raises questions about the proposed plan's feasibility.

"Leaving HWCC's rights and obligations in post-bankruptcy limbo, notwithstanding HWCC's good faith negotiations and cooperation throughout this case, controverts the purpose of Chapter 11," HWCC said in the filing.

Hollywood Casino Shreveport's disclosure statement was approved April 22. A hearing on plan confirmation is scheduled for June 13.

Hollywood Casino Shreveport owns and operates a riverboat casino and hotel complex located on the Red River in Shreveport, La. Black Diamond and other creditors filed an involuntary bankruptcy case against the casino and resort company on Sept. 10, 2004. The Chapter 11 case number is 04-13259.

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