Hollywood Casino Shreveport files disclosure statement, reorganization plan

By Jeff Pines

Washington, Oct. 29 - Hollywood Casino Shreveport filed its disclosure statement and reorganization plan with the U.S. Bankruptcy Court for the Western District of Louisiana Thursday.

Under the proposed restructuring previously announced by the company, the bondholders would get $140 million of new first mortgage notes, interest in a corporation that will have a $20 million preferred equity interest and a 25% non-voting equity interest in a reorganized company along with an amount of cash for their $189 million plus interest of their secured notes.

The agreement calls for the restructuring to be done through a voluntary Chapter 11.

The financing for the deal will come from Reno, Nev.-based Eldorado Resorts LLC.

This reorganization plan calls for $93.75 million of first mortgage note claims, which is the secured portion of the first mortgage notes, to get new notes for the same principal. The first mortgage note deficiency claim, which Hollywood Casino Shreveport estimates there are $92.37 million, will get a pro rata share of $140 million of new notes, noteholder interests in the reorganized company, noteholder cash distribution, and the net proceeds, if any, of the liquidating trust.

Class 3, which is the secured portion of the notes, will get new notes with the same principal; and class 5, the unsecured portion, are both entitled to vote. The estimated recovery for class 3 is 100%, and the estimated recovery for class 5 is 20%.

Hollywood Casino Shreveport also has class 4 senior secured note claims with secured claims of $24.25 million and class 6, the unsecured portion of the senior secured notes. Class 4 will get new notes, and class 6 will get the same treatment as class 5. The estimated recovery for class 4 is 100% and for class 6 20%.

The company issued $150 million of first mortgage notes on Aug. 10, 1999 and then sold $39 million of senior secured notes on June 15, 2001.

General unsecured claims, estimated to be $8 million, will be paid 20% in cash of the face value of the claim, but if allowed claims are greater than $12.5 million, claimsholders will get a pro rata share of $2.5 million.

Existing equity claims will be cancelled.

Black Diamond Capital Management LLC, along with other creditors, filed a motion to involuntarily throw Hollywood Casino Shreveport into bankruptcy on Sept. 10. Black Diamond alleges it made a better offer for the company than Eldorado's offer.

Hollywood Casino Shreveport's Chapter 11 case number is 04-13259.

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