Riviera Holdings wins court confirmation of plan of reorganization

By Caroline Salls

Pittsburgh, Nov. 17 - Riviera Holdings Corp.'s plan of reorganization was confirmed Wednesday by the U.S. Bankruptcy Court for the District of Nevada.

Under its plan, Riviera said that 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 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.

Treatment of creditors will include:

• Holders of priority claims will be paid in full in cash;

• Holders of other secured claims will be paid in full in cash or be otherwise left unimpaired;

• Holders of general unsecured claims will be paid in full in cash, capped at $3 million;

• Holders of first-priority senior secured claims will receive a share of a $50 million series A term loan;

• Holders of senior secured claims will receive a portion of the series A term loan if a total new money investment alternative is chosen, less a portion received by first-priority senior secured lenders. These creditors will also receive 80% of class B shares.

In addition, if the partial new money investment is completed, senior secured claimants will receive an additional 13% of class B shares;

• Holders of intercompany claims will be reinstated or canceled, at the company's option;

• Holders of Riviera Holdings equity interests will receive no distribution; and

• Intercompany equity interests will remain unaltered.

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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