All Operations to Continue and Vendors to Be Paid in Full on Normal Terms
MESQUITE, NV (March 2, 2010) — Black Gaming, LLC and various subsidiaries and affiliates (collectively “Black Gaming” or the “Company”) yesterday announced that it has filed for protection under Chapter 11 of the Bankruptcy Code in accordance with the terms of the December 22, 2009 Lockup Agreement entered into with the holders of approximately 70% of the Company’s $125,000,000 Senior Secured Notes to restructure Black Gaming’s indebtedness, provide for an investment of new capital into the Company and enhance Black Gaming’s executive management team (as reorganized, Black Gaming will be referred to herein as “Reorganized Black Gaming”).
During the pendency of the Chapter 11 Cases all operations of the Company will continue under current management on a “business as usual” basis . The Company anticipates that it will continue timely payments to vendors under normal trade terms, as currently being made, without interruption and will honor all customer deposits and commitments.
In a statement, Black Gaming’s majority owner, Robert R. “Randy” Black, Sr. noted, “We are moving forward with our plans as previously outlined in the Lockup Agreement. As previously stated, our problem is one of leverage; we have more debt than our operations can support. Our agreement with our lenders is designed to resolve this by restructuring our debt to a level our operations can sustain and to provide additional capital.
“Given the size and complexity of the Company and its debt structure, the Company and its financial advisors have determined that the most effective means to implement the restructuring is through these Chapter 11 filings by the Company and its subsidiaries. The Company expects that the Chapter 11 cases will move through the bankruptcy court system expeditiously.
“To ensure that all of our operations continue to operate normally throughout this process, we expect that all vendors will be paid on the same current terms on which they presently are being paid for all goods and services provided to Black Gaming, including goods and services provided immediately prior to the Chapter 11 filing.”
Under the proposed plan of reorganization plan filed today when and if consummated:
- The Company’s Senior Credit Facility with Wells Fargo Foothill, Inc. will be paid in full.
- The Company’s Senior Secured Noteholders will exchange their notes and claims thereunder for a new credit facility of $62,500,000.
- The Company’s Senior Subordinated Noteholders will receive warrants to purchase equity interests in Reorganized Black Gaming in exchange for their notes and claims.
- To the extent permitted under the Bankruptcy Code, General Unsecured Claims, including vendors, will be paid in cash.
- Randy Black, Sr. and other investors will contribute cash in excess of $18,250,000 in exchange 100% of the new equity interests in Reorganized Black Gaming.
- Randy Black, Sr. will remain Chief Executive Officer; Anthony Toti will remain Chief Operating Officer; and Sean McKay will remain Chief Financial Officer.
Black continued: “We are extremely pleased with this initial step toward improved financial health. In this difficult economy, gaming has been hit hard, and our Company was no exception. We are one of the few gaming companies that has been able to reach a mutual compromise with our lenders, and it is my belief that we reached this agreement due to the strength and positioning of our properties and the experience of our management team and its employees.
“We believe this agreement will pave the way for our Company to emerge stronger, with less debt and with a team of management and employees ready to guide our hotel-casino resorts into the future.
“We want to salute and thank our loyal customers, our fabulous employees and all of those who have stuck by us and continued to support us. We know that we still have a lot of work to do, but we are confident that this restructuring will provide the path to get there.”
Approval of the restructuring and all principal steps related thereto, will be subject to numerous preconditions, including, but not limited to, preparation of definitive documentation, the approval of the plan of reorganization by creditors and the Bankruptcy Court, and certain approvals, granting of licenses and findings of suitability by the Nevada Gaming Commission and the City of Mesquite.
This Press Release is intended only as a summary of the agreement and is qualified in its entirety by the written agreement. The agreement may be viewed at www.gordonsilver.com under the “Public Filings” tab.
About Black Gaming
Black Gaming, LLC, headquartered in Las Vegas, Nevada, is a holding company and is an owner and operator of 3 gaming entertainment properties located in Mesquite, Nevada.
The information in this Press Release contains “forward-looking statements” within the meaning of U.S. federal securities laws. The forward-looking statements, including, without limitation, statements regarding the Company’s expectations concerning the bankruptcy process, the continuation of day-to-day operations, payments to vendors and employees in the ordinary course, the proposed restructuring Plan, or the Company’s proposed new capital structure, are subject to risks, uncertainties and assumptions. The Company’s actual results could differ materially from those expressed in its forward-looking statements as a result of these risks and uncertainties, including, without limitation, the impact of today’s announcement on the Company’s operations, failure to obtain necessary Bankruptcy Court or gaming authority approvals, loss of continued support of the Plan by the Company’s consenting lenders, delays in the confirmation or effective date of the Plan due to factors beyond the Company’s control, failure to consummate the Plan, failure to meet the Plan objectives or to execute the Plan, the Company’s ability to obtain and maintain normal terms with vendors and service providers, the Company’s ability to attract and retain customers, and other economic factors. The Company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.
Black Gaming, LLC
Marty Rapson, 702-346-6883
SOURCE: Black Gaming, LLC