Station Casinos Seeking Mid-April Bankruptcy Protection

LAS VEGAS, Nevada -- As reported by the Las Vegas Sun: "Station Casinos Inc. revealed in court papers this week that it expects to file for bankruptcy protection on or before April 15, the date
  a debt forbearance agreement expires and five days after the deadline for bondholders to vote on Station's current debt-exchange offer.

Station had its attorneys file court papers Monday opposing a motion for a court injunction sought by a bondholder who is seeking to block the debt-exchange, a key part of Station's plan to file a pre-packaged bankruptcy petition that would keep its business operating and includes a cash infusion of $244 million by Station owners the Fertitta family and Colony Capital.

Boyd Gaming Corp., in the meantime, has been taking its case to buy all or part of Station directly to bondholders after it was rebuffed by Station.

With its revenue and cash flow hurt by the recession, Station has proposed the prepackaged Chapter 11 bankruptcy reorganization because of its inability to keep up with debt payments. In all, it's trying to restructure more than $5 billion of debt.

In U.S. District Court in Las Vegas, bondholder S. Blake Murchison is represented by class-action securities lawyers who are seeking an injunction to block the exchange offer in which Station would reduce its debt by exchanging $2.3 billion in bonds for cash and notes at exchange rates of 10 cents to 50 cents on the dollar, depending on the class of bond held. The deal is aimed at saving the company some $100 million per year in interest costs.

The bottom line, Murchison argues, is that the exchange offer will improperly subordinate existing bonds during a Station bankruptcy and that only certain classes of bondholders are allowed to vote on the deal..."