Station Casinos Likely to File Ch. 11 by Mid-April

LAS VEGAS-Station Casinos Inc. plans to file for protection from creditors under Ch. 11 of the US Bankruptcy Code on or before April 15, 2009 if it cannot otherwise solve its debt problems, according to published reports citing a Monday filing in Nevada federal court and company sources. The locally headquartered operator of off-Strip casinos reportedly revealed the plans in response to a request for an injunction against a possible filing.

The news comes the same day the company revealed to the SEC that it elected not to make a scheduled $9.9 million interest payment due March 15, 2009 to holders of the company’s $300 million 65/8% Senior Subordinated Notes due 2018, and that the grace period with respect to the payment ends on April 14, 2009. Previously, the company elected not to make a scheduled $24.1 million interest payment that was due on March 1, 2009 to holders of the Company’s $700 million 67/8% Senior Subordinated Notes due 2016, and that are subsequent forbearance agreement restricts the related bondholders and senior lenders from exercising remedies before April 15, 2009.

In February, Station Casinos and some of its lenders offered up a prepackaged bankruptcy proposal that would pay investors 10- to 50 cents on the dollar in secured notes and cash in exchange for some $2.3 billion of existing bonds. Affiliates of the Fertitta family and Colony Capital have agreed to put up as much as $244 million in new capital to maintain their current interests in the company, according to Station Casinos. The deadline for bondholder to approve the deal is April 10.