LA Casino Company Comes out of Bankruptcy
The largest chunk of the controlling stocks by the revitalized casino company is held by the fund management division of Wayzata Investment Partners LLC, which also has majority control of Fitzgeralds Casinos, Black Hawk and Majestic Star Casinos in Indiana.
A reliable source from the company also confirmed that lenders of the pre-bankruptcy Majestic Star also hold stakes in the parent company of the revitalized casino company, Majestic Holdco LLC. Majestic Star filed for Chapter 11 voluntary bankruptcy in November 2009 following a default in the repayment of long term debts that covered most of its gaming assets amounting to $580 million.
Majestic Star was organized and managed by the late Don Barden, an eminent gaming executive who also had controlling stakes in LA-based Fitzgeralds through another holding company. Barden died last May, just two months after the bankruptcy judge affirmed the proposed reorganization plan for the casino company.
Majestic Star, which was formally organized in 1993, went into voluntary bankruptcy when it faced potential foreclosure after the talks with lenders for the restructuring of its maturing loans fell through. At the time of its application for voluntary bankruptcy, Majestic Star had total assets of $540,500,000 and total liabilities of $941,700,000, of which amount includes some $630,000,000 in maturing and overdue loans.
According to an unnamed source from the US Bankruptcy Court that is handling the Majestic Star case, the secured note holders will be able to get back about 52 cents on the dollar for the aggregate liabilities by the casino company amounting to $348,400,000. On the other hand, the other note holders will be able to get back about 42 cents on the dollar for the aggregate liabilities by the casino company amounting to $233,100,000.
“We estimate the note holders will have a recovery of about 25 percent from this arrangement,” explained by the unnamed source from the US Bankruptcy Court.
Mike Darley, the Chief Operating Officer of Majestic Star, has assured that the company is poised to regain its previous status in the gaming business. “We are now again in a strong position to provide gambling aficionados with topnotch gaming and entertainment experience,” Darley added.
The reorganized board of the casino company is composed of Cezar Froelich, founding partner and Chairman of Shefsky and Froelich, Ltd.; John Lisner, director of the Children’s Tumor Foundation; and Joseph Deignan and Halloran, both representing Wayzata.
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