Second Greektown Reorganization Plan to Be Considered

From the Freep via Pechanga:

A second plan to speed Greektown Casino’s exit from bankruptcy protection could go out to creditors for a vote next week.

U.S. Bankruptcy Court Judge Walter Shapero told lawyers for the casino and its creditors Friday that he expected to sign an order Monday to approve the disclosure statement. That would clear the way for the plan to be sent out next Friday for creditor voting.

The confirmation hearing is scheduled for Jan. 12. The goal is for plan confirmation by Jan. 31 and for the casino to emerge from bankruptcy by June 30.

Greektown Casino still needs to get the City of Detroit’s approval before it can approach state regulators for a 15% tax rollback.

The rollback is anticipated in the plan and would help Greektown compete with Detroit’s other two casinos. The Detroit City Council rejected a settlement worked out between its lawyers and the casino in October.

“We look forward to resolving all open matters with the City of Detroit,” said Daniel Weiner of Schafer and Weiner in Bloomfield Hills, which represents Greektown Casino. “Everyone is still talking.”

The new plan would ensure bondholders, owed about $185 million, would receive 6% of common stock in the reorganized company and rights for $185 million in new preferred stock.

MFC Global Investment Management LLC, Oppenheimer Funds Inc., Brigade Capital Management and Sola Ltd. would own the other 94% of the casino.

The plan buys out the secured lenders led by Merrill Lynch Capital Corp. and offers improved recovery to unsecured lenders.

The debtor-in-possession financing of $190 million the casino needs to exit bankruptcy will be provided instead by Goldman Sachs, said Chuck Moore, a senior managing director for Conway MacKenzie Inc. in Birmingham, a restructuring firm advising Greektown Casino.