Station Casinos granted court approval for plan of reorganization, $772 million asset sale

By Jennifer Lanning Drey

Portland, Ore., Aug. 27 - Station Casinos, Inc. received court approval of its plan of reorganization Friday from the U.S. Bankruptcy Court for the District of Nevada, according to an attorney for the company.

The court also approved the related sale of substantially all of its assets to a newly formed company owned by Fertitta Gaming, Colony Capital and the mortgage lenders to FCP Propco, LLC for $772 million.

Station will next seek regulatory approval for the transaction. Pending approval, the company expects to emerge in the first quarter of 2011, company spokesperson Lori Nelson said Friday.

As previously reported, under Station's plan of reorganization, eligible operating company general unsecured creditors, senior noteholders and subordinated noteholders will receive a share of warrants; creditors that are also accredited investors will receive a share of investment rights; and creditors that become eligible operating company unsecured creditors through participation in a property company rights offering and the purchase of equity will receive post-effective date NPH investment rights.

Creditor treatment

Under Station's plan of reorganization:

• Holders of other secured claims will be paid in full in cash;

• Holders of pre-bankruptcy mezzanine loan guaranty claims, land loan guaranty claims, general unsecured claims in debtors other than Station Casinos Inc., 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;

• Holders of pre-bankruptcy operating company secured claims against Station Casinos will receive their share of: $317 million of cash, plus Gun Lake reimbursement proceeds in excess of $20 million, less an excess AMT amount; $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 payment-in-kind credit agreement;

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

• Holders of general unsecured claims and senior notes claims against Station will receive warrants and investment rights;

• Holders of subordinated notes claims against Station also will receive warrants and investment rights, subject to subordination arrangements; and

• Holders of equity interests in Station 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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