Majestic Star Casino and City of Gary, Ind., agree to settlement

By Lisa Kerner

Charlotte, N.C., April 27 - Majestic Star Casino, LLC asked the U.S. Bankruptcy Court for the District of Delaware to enter an order authorizing the debtors to enter into a settlement and new development agreement with the city of Gary, Ind., according to a Wednesday filing with the court.

The agreement incorporates provisions set forth in the term sheet by and among Majestic Star Casino LLC, Majestic Star Casino II, Inc., the official committee of unsecured creditors, the Bank of New York Mellon Trust Co., NA, Wells Fargo Capital Finance, Inc., the City of Gary, Ind., and the Gary Redevelopment Commission.

A hearing is set for May 17.

Majestic agreed, among other terms, to resume making monthly payments of 3% of its adjusted gross gaming receipts, and not less than $6 million a year, to Gary, Ind.

The City of Gary agreed to make local infrastructure improvements, including the construction of access roads, the filing said.

The agreement ends years of litigation and months of negotiations during the Chapter 11 cases.

As previously reported, on March 10 the court confirmed Majestic Star's second amended joint plan of reorganization.

Majestic Star, a Las Vegas-based owner and operator of casino hotels, filed for bankruptcy on Nov. 23, 2009. Its Chapter 11 case number is 09-14136.

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