Yesterday we took a look at the old mob ties the Fertittas used to have way way back. Now let’s see what’s happening with their financial problems of today: filing for bankruptcy protection seems like a very real possibility for their company, Station Casinos.
Station Casinos Inc, which is fending off bankruptcy, said on Wednesday it has a received a letter from a lawyer representing its bondholders saying they view terms in a proposed debt exchange as inadequate.
The statement leaves the casino operator in a precarious position and could result in the company tripping terms in its bank loans, which could lead the company to file for bankruptcy protection, said Barbara Cappaert, analyst at KDP Investment Advisors.
Long story short on what happened is that Station took a massive amount of debt on to consolidate ownership … basically they bought out all the other people who had a stake in the casino, and they did it with borrowed money. And now the economic crisis has popped up and bitchslapped them, sucking dry Station’s coffers to the point where there’s no way in hell they’re going to be able to pay back their loans as per the terms of their agreement.
We all saw first hand what happens when a company ‘breaks covenant’ with a creditor … that was the root of the whole Showtime / ProElite asset grab. Station Casinos are big enough that you’re not going to see anything like that happening any time soon, but the company does have to figure out a way to escape this debt crisis they’ve created for themselves.