Majestic Star amends plan treatment for senior lenders, noteholders

By Caroline Salls

Pittsburgh, Nov. 30 - Majestic Star Casino, LLC filed an amended plan of reorganization Tuesday with the U.S. Bankruptcy Court for the District of Delaware that changes the proposed distribution for holders of senior secured credit facility claims, senior secured notes indenture claims and senior notes indenture claims.

Under the amended plan, holders of senior secured credit facility claims will receive a share of either a new senior secured credit facility paydown amount and a new senior secured credit facility if no first-lien alternative financing is completed or cash from the proceeds of the financing if it is completed.

The previous plan did not base the distribution on the financing scenarios. Instead, the original plan gave senior secured creditors a share of the new loan and paydown amount.

Holders of senior secured notes indenture claims will receive a share of 58% of the company's new membership interests and either new notes if no second-lien alternative financing is completed or a share of $100.6 million in cash if it is completed.

Under the original plan, these creditors were slated to receive new notes and 95% of membership interests.

Also under the amended plan, holders of senior notes indenture claims will receive 42% of the new membership interests, up from 35%.

As previously reported, cash distributions will be funded by the company's cash balances and/or cash from business operations.

Under the plan:

• The Majestic Star debtors will retain and reorganize around their casino gaming properties in Gary, Ind., Tunica, Miss., and Black Hawk, Colo., subject, in the case of the Black Hawk, Colo., gaming property, to obtaining all governmental licenses, suitability determinations and other required approvals within 240 days following the plan confirmation date;

• Holders of senior secured credit facility claims will either receive a share of a new senior secured credit facility paydown amount and a new senior secured credit facility or cash proceeds from new first-lien financing;

• Holders of senior secured notes indenture claims will receive 58% of new membership interests and either a share of new senior secured notes or $100.6 million in cash;

• Holders of senior notes indenture claims will receive a share of 42% of the membership interests; and

• Holders of discount notes indenture claims and equity interests will receive no distribution.

Majestic Star, a Las Vegas-based owner and operator of casino hotels, filed for bankruptcy on Nov. 23, 2009. Its Chapter 11 case number is 09-14136.

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