Station Casinos amends reorganization plan to reflect asset sale, altered creditor recoveries

By Jennifer Lanning Drey

Portland, Ore., June 17 - Station Casinos, Inc. filed an amended joint plan of reorganization Thursday with the U.S. Bankruptcy Court for the District of Nevada reflecting the proposed $772 million sale of substantially all of its assets and amending some creditor recoveries.

Specifically, under the amended plan holders of pre-bankruptcy operating company secured claims against Station Casinos will now receive their share of: $317 million of cash, plus the Gun Lake reimbursement proceeds in excess of $20 million; $430 million of term loans, less the Gun Lake reimbursement proceeds in excess of $20 million; and $25 million of term loans that will be subject to the terms of the new Opco paid-in-kind credit agreement.

Under the prior plan, holders of other secured claims against Station Casinos were to receive a share of the new Opco plan consideration.

Additionally, under the amended plan holders of general unsecured claims and mortgage lender claims against Station will receive no distribution if the stalking horse bid is the successful bid.

Under the previous plan, holders of general unsecured claims and mortgage lender claims against Station were to receive a share of any new Opco plan consideration remaining after payment of credit agreement claims.

Holders of senior notes claims against Station also will receive no distribution under the amended plan if the stalking horse bid is the successful bid.

Previously, they were to receive a share of any new Opco plan consideration remaining after payment of credit agreement claims, as well as the distribution that would otherwise have gone to holders of subordinated notes claims.

Holders of equity interests in other Opco debtors will receive no distribution under the amended plan; whereas, they were previously to receive a share of any new Opco distribution attributable to that debtor.

The amended plan notes that Station will file a supplemental disclosure following the asset sale auction if it accepts a bid other than the stalking horse bid.

As previously reported, Station plans to sell substantially all of the company's assets and some of its Opco debtor and non-debtor wholly owned subsidiaries.

The stalking horse bidder is FG Opco Acquisitions LLC, an entity owned by Fertitta Gaming LLC and the property company's mortgage lenders.

The $772 million offer is subject to competing bids, and an auction is scheduled to begin Aug. 6.

Creditor treatment

If the $772 million stalking horse bid is named the high bid at auction, treatment of creditors under the amended plan will include:

• Holders of administrative claims, priority tax claims, Propco other secured claims and other priority claims will be paid in full in cash;

• Holders of pre-bankruptcy guaranty claims, mezzanine loan guaranty claims, land loan guaranty claims, general unsecured claims, intercompany claims and equity interests in the parent companies will receive no distribution;

• Holders of pre-bankruptcy mortgage loan claims against Propco will receive the new transferred assets as designee of the mortgage lenders and their share of Propco excess effective date cash and any recoveries received on account of claims against Station Casinos, including a master lease rejection damage claim;

• Holders of Propco general unsecured claims, intercompany claims and equity interests will receive no distribution;

• Holders of other secured claims against Station Casinos will receive full cash payment or have their claims left unimpaired through assumption of the claims and retention of related liens;

• Holders of pre-bankruptcy operating company secured claims against Station Casinos will receive their share of: $317 million of cash, plus the Gun Lake reimbursement proceeds in excess of $20 million; $430 million of term loans, less the Gun Lake reimbursement proceeds in excess of $20 million; and $25 million of term loans that will be subject to the terms of the new Opco PIK credit agreement;

• Holders of master lease rejection damages claims against Station will receive all of the master lease collateral;

• Holders of general unsecured claims and mortgage lender claims against Station will receive no distribution under the plan if the stalking horse bid is the successful bid;

• Holders of senior notes claims against Station also will receive no distribution under the plan if the stalking horse bid is the successful bid;

• Holders of equity interests in Station will receive no distribution; and

• Holders of equity interests in other Opco debtors will receive no distribution.

Station, a Las Vegas-based casino company, filed for bankruptcy on July 28, 2009. Its Chapter 11 case number is 09-52470.

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