Majestic Star Casino emerges from bankruptcy

By Angela McDaniels

Tacoma, Wash., Dec. 1 - Majestic Star Casino, LLC emerged from bankruptcy after its plan of reorganization became effective on Thursday, according to a company news release.

As part of the plan, the company eliminated more than $500 million of debt and its lenders will become the new owners of Majestic Holdco, LLC, the ultimate parent of the company.

Private investment funds managed by Wayzata Investment Partners LLC will be the largest holders of Majestic Holdco.

The company's reorganization plan was approved on March 10, 2011.

Under the plan, the treatment of creditors was expected to be as follows:

• 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 if no first-lien alternative financing is completed or cash proceeds from new first-lien financing if it is completed;

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

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

• Holders of general unsecured claims and rejection damages claims will receive the lesser of cash equal to 25% of their claim or a share of $1 million; 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 in the U.S Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-14136.

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