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Riviera senior secured lenders agree to backstop plan investments
By Caroline Salls
Pittsburgh, July 21 - Riviera Holdings Corp. requested court approval to enter into a backstop commitment agreement with some of its senior secured lenders, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Nevada.
Under its plan of reorganization, Riviera said some lenders will provide it with either a total new money investment in the form of a $20 million series B term loan or a partial new money investment through a $10 million revolving credit facility.
The company said the backstop lenders have agreed to provide their share of the investment and backstop any unsubscribed portion.
If the $20 million term loan is funded and the $10 million working capital facility is fully committed on the plan effective date, the backstop investors will receive 5% of the equity in the reorganized company.
If the series B term loan is not made, but the entire working capital facility is provided, the backstop investors will receive a $300,000 fee.
In addition, the backstop investors would receive a $1 million fee if the agreement was terminated.
Riviera owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, Colo. The company filed for bankruptcy on July 12. The Chapter 11 case number is 10-22910.
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