Black Gaming again hints at bankruptcy to complete restructuring

By Caroline Salls

Pittsburgh, Aug. 14 - Black Gaming, LLC will likely be required to file for Chapter 11 bankruptcy in order to successfully complete the restructuring of its outstanding debt, according to a 10-Q filed with the Securities and Exchange Commission.

The company said that bankruptcy is likely whether or not it can agree on a restructuring with lenders and bondholders. It is evaluating financial and strategic alternatives, including a recapitalization, refinancing, restructuring or reorganization of its obligations, as well as a sale of some or all of its businesses.

Black Gaming said it is working with its advisers toward a transaction that would address the decline in its operating results and capital structure.

As previously reported, the company received a notice of default and reservation of rights letter from credit agreement administrative agent Wells Fargo Foothill, Inc. The default stems from the company's failure to meet EBITDA requirements, to make an overadvance payment and to make a $5.63 million interest payment due Jan. 15 on its 9% senior secured notes.

In addition, the company is in default on its senior notes because it failed to make the $5.63 million interest payment due July 15 on the notes. In addition, Black Gaming did not make the $4.21 million interest payment due July 15 on its senior subordinated notes because it is prohibited to do so until the payment default on the senior notes is cured or waived.

According to the 10-Q, if the Foothill facility or 9% notes are accelerated, Black Gaming would also be in default under its 12¾% senior subordinated notes.

Black Gaming is a Las Vegas-based hotel casino operator.

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