Greektown Less Likely to Sell, Given Low Bids

From the Detroit News (via Pechanga):

Greektown Casino-Hotel will spend more time looking at ways to reorganize its debts rather than selling the property to exit bankruptcy, after multiple bids came in lower than expected, a financial adviser for the gambling hall said Thursday.

Chuck Moore, an adviser from Birmingham-based Conway MacKenzie Inc., which is working on Greektown’s bankruptcy, told the Michigan Gaming Control Board at its Thursday meeting that his team would shift focus toward looking at ways the casino can reorganize some $777 million in debt.

“There was disappointment at the values of the bids we’ve seen so far,” Moore said. “Our creditors don’t believe they adequately compensate for the performance of the property.”

Officials in charge of Greektown’s estate have been shopping the property around to potential bidders in a two-pronged approach to getting the casino out of Chapter 11 protection.

Moore and his team began soliciting bidders this year. At least two interested parties — Bloomfield Hills businessman Tom Celani, who formerly owned part of MotorCity Casino, and Pennsylvania-based Penn National Gaming — made their bids public, but not the details of their proposals.

Moore said bids could still come in, but given the value-seeking nature of many interested buyers, “a larger amount of time is being spent on plans for reorganization.”

The low-ball bids come as Greektown’s new management, brought in at the behest of its creditors this year, has embarked on an ambitious new marketing strategy to turn around fortunes at Greektown, which is the city’s smallest gambling hall by revenue. They’re pitching the casino as a good value for consumers in a time of recession, with $99-a-night hotel deals, low-price buffet offers and kitschy promotions like “Chick-Tac-Dough,” where players challenge a live chicken to a game of tic-tac-toe to win bonus money for casino play.

Greektown was the only casino to see an uptick in April revenues compared with the same month last year; its $28.59 million taken in last month was a razor-thin 0.06 percent higher than its April 2008 revenues, the last month before it entered bankruptcy. Competitors MGM Grand Detroit and MotorCity saw revenues fall 5.58 percent and 5.32 percent respectively year-over-year in April.

Combined, the city’s casino revenues and tax receipts fell 4.11 percent in April, still less than drops seen in other major gambling destinations like Las Vegas and Atlantic City, N.J.