Station Casinos' unsecured creditors, lenders object to asset auction

By Lisa Kerner

Charlotte, N.C., April 22 - Station Casinos, Inc. official committee of unsecured creditors and the consolidated independent lenders filed objections to the company's motion to establish bidding procedures related to the sale of Station Casinos' assets.

Hearings on the objections will be held on May 4, according to filings with the U.S. Bankruptcy Court for the District of Nevada.

The independent lenders believe the bid procedures "are skewed heavily in favor of the inside buyer." In addition, the debtors have not actively marketed the OpCo assets or solicited potential buyers or made a data room available, the lenders' filing said.

"Despite what the auction should provide, the debtors, under the control of Station chairman of the board and chief executive officer Frank Fertitta III, Lorenzo Fertitta and Colony Capital LLC and its affiliates" have elected to remove certain assets owned and controlled by Station Casinos from the auction to sell them to Propco through a private sale.

As previously reported, Station filed a joint plan of reorganization based on an equity investment commitment.

The mortgage lenders to Station debtor FCP Propco, LLC, which holds debt secured by Red Rock Casino Resort Spa, Palace Station, Boulder Station and Sunset Station, will become the equity owners of a newly formed company and will sell 46% of the equity to the Fertittas.

The Fertittas will then make a significant new investment to purchase their equity in the new company.

Station said previously that the remaining equity will be owned primarily by the property company lenders and Colony Capital, which will also be making a new investment in the company.

Station, a Las Vegas-based casino company, filed for bankruptcy on July 28, 2009 in the U.S. Bankruptcy Court for the District of Nevada. Its Chapter 11 case number is 09-52470.

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