Creditors Object to Greektown Reorganization Plan

From the Detroit News:

DETROIT — Greektown Casino LLC, which is in bankruptcy reorganization, shouldn’t get an exclusive right until June 1 to file a turnaround plan, a group of creditors and a U.S. government representative told a judge.

Greektown’s request to block competing plans for more than eight months beyond the current Sept. 26 deadline should be denied because the company can realistically gauge its success long before then, U.S. Trustee Daniel McDermott said in an objection filed Monday in U.S. Bankruptcy Court in Detroit.

“The court should not permit the debtors to remain in Chapter 11 in a shroud of secrecy” while ” keeping other potential plan proponents off the playing field for such an extensive length of time,” McDermott said in the filing.

Closely held Greektown won court approval last June to borrow $150 million to continue operations and construction of a new hotel and gaming floor. McDermott questioned the viability of the company’s projected future operations during an economic decline in the U.S.

“The question that must be answered is whether the projections are reasonable for the foreseeable future in the given economic and political milieu in Detroit,” McDermott said in the filing.

Objections also were filed by the Michigan Gaming Control Board and the official committee of unsecured creditors.

Greektown sought court protection from creditors on May 29, citing cost overruns in a $332 million expansion. It opened in 2000, four years after Michigan citizens voted to legalize three gambling facilities in Detroit. It employs about 1,976 people, and attracts 15,800 visitors a day, the company said.