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Station Casinos sued over reorganization plan

Posted by: on Fri, Feb 13, 2009

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Two of the attorneys who sued Station Casinos Inc. three years ago over the company’s deal to go private are going after Station again, this time over Station’s plan to get rid of its high-cost debt and reorganize in bankruptcy court.
Las Vegas lawyers G. Mark Albright and Martin Muckleroy filed suit Thursday in U.S. District Court in Las Vegas on behalf of bondholder S. Blake Murchison, alleging Station’s debt-reduction plan would harm many of the company’s bondholders. They are seeking class-action status for the suit in order to represent all the bondholders they say are not getting treated fairly by Station.
“In the face of Station Casinos’ near-certain bankruptcy, debt default and other events of insolvency, the defendants are trying to avoid debt obligations they owe to a large portion of their corporate bond holders, including the plaintiff,’’ the lawsuit says. “The scheme the … defendants have created is a bond-exchange offer, which gives a limited number of Station Casinos’ bond holders the opportunity to obtain new bonds which will subordinate the existing bonds during an event of bankruptcy. Station Casinos’ bond holders to whom the … defendants have unilaterally chosen not to offer bond exchanges are left holding the short end of the stick and face the imminent threat that their investments in — and contracts with — Station Casinos will not be honored during a liquidation process.’’ Read the rest of the story…