Hollywood Casino Shreveport obtains court approval of plan confirmation agreement

By Caroline Salls

Pittsburgh, June 23 - Hollywood Casino Shreveport's settlement agreement for confirmation of its joint plan of reorganization was approved by the U.S. Bankruptcy Court for the Western District of Louisiana, according to an 8-K filing with the Securities and Exchange Commission.

According to the filing, a written order confirming the plan will be presented to the bankruptcy court soon.

Hollywood entered into the agreement on Aug. 27, 2004 with Eldorado Resorts, LLC providing for the acquisition of Hollywood Casino Shreveport by affiliates of Eldorado.

The terms of the agreement are incorporated in the joint plan.

The agreement provides for a financial restructuring of Hollywood Casino Shreveport that will significantly reduce outstanding secured debt obligations and annual cash interest payments.

Under the restructuring, holders of the Shreveport first-mortgage notes and senior secured notes will receive $140 million of new 10% senior secured notes due 2012, 100% of the common stock of a corporation that will hold a $20 million preferred equity interest, which will accrue distributions at an annual rate of 13% and a 25% non-voting equity interest in the reorganized Hollywood Casino Shreveport and cash in an amount to be determined, in exchange for the existing secured Shreveport notes in the principal face amount of $189 million plus accrued interest.

The 25% non-voting equity interest in the reorganized company has associated put and call options that become effective anytime after a full fiscal year of operations where the reorganized company's trailing EBITDA and management fees for the four fiscal quarters preceding the put or call date exceeds $30 million.

The investors will acquire a 75% voting equity interest in the reorganized company.

The agreement, which was extended by amendment to July 31, remains subject to Louisiana Gaming Control Board approval and other conditions.

A hearing with the gaming control board is scheduled for July 19.

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 Chapter 11 case against the casino and resort company on Sept. 10, 2004. The Chapter 11 case number is 04-13259.

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