Bankruptcy judge in Nevada approves auction of 11 Station Casinos properties

Judge approves auction of Station Casinos hotels

RENO, Nev. — A federal bankruptcy judge in Reno on Friday approved a plan to auction 11 Station Casinos properties on the open market.

U.S. Bankruptcy Court Judge Gregg Zive said he will supervise the Aug. 6 sale.

Zive said he wanted the company and debt holders to continue discussing ways to maximize the company’s value. Station has about $6 billion in debt.

“This, in fact, is a complex set of relationships that are difficult to disentangle,” Zive said. “There would be legal issues and questions at every step of that separation, all of which most probably involve the incurrence of a great deal of fees, costs and expenses.”

The proposal would spin off the Red Rock Resort, Palace Station, Sunset Station, Boulder Station and Wild Wild West properties into a holding company owned by company lenders, real estate investor Colony Capital, and members of the casino company’s founding family, the Fertittas.

The holding company would offer a starting bid of $772 million for the remaining 11 casinos, land holdings, and American Indian casino contracts as one entity.

Zive’s ruling requires bidders to submit letters of intent by July 1 and bids by July 30. The bids are required to be at least $17.5 million greater than the Fertittas’ opening bid.

The nearly 90-minute ruling came after a hearing Thursday that stretched for nearly 10 hours.

The auctions means thousands of employees at the properties will keep their current jobs if the Fertittas’ bid is approved. The jobs would not be guaranteed if another company buys the properties, but Zive said interested bidders would likely want to keep employees at the properties.

Zive said trouble could follow if the bankruptcy reorganization fails.

“There is little doubt such a division, if it were to occur in the absence of a rational and comprehensive business approach, could create economic disaster for many parties,” Zive said.

Information from: Las Vegas Review-Journal, www.lvrj.com