Detroit City Council

Detroit City Council Rejects Greektown Bankruptcy Deal

Matthew L.M. Fletcher

From FREEP:

The Detroit City Council voted 6-2 Tuesday to reject a $15.3-million settlement for the city that would have transferred ownership of Greektown Casino to a new company after the casino emerges from bankruptcy.

The vote came after a group of local investors, including former Highland Park Emergency Financial Manager Arthur Blackwell, made its case to the council that the investors deserve some form of payment in the bankruptcy.

“I’ve never heard of a deal where the casino has never lost a dime” being in bankruptcy, said Blackwell, an investor who sold most of his stake in Greektown to casino mogul Don Barden, but retains $5 million in Greektown options. “By voting ‘No’ … we’ve got hope for something.”

But Mayor Dave Bing said he will ask the council to reconsider its vote.

In a statement, Bing decried the vote as “an attempt to force the Greektown bankruptcy court to make payments to a small group of casino investors” that violates U.S. bankruptcy rules.

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Greektown & Motor City Credit Rating Downgraded

Matthew L.M. Fletcher

From Crain’s Detroit Business:

wo Detroit casinos are rolling snake eyes in the debt market.

A top ratings service downgraded its outlook for MotorCity Casino‘s parent company, citing a host of financial concerns. Greektown Holdings L.L.C. has until the end of this week to submit a reorganization plan that can resolve its swelling debts without need for a sale.

An agreement entered in U.S. Bankruptcy Court last month between the troubled Greektown Casino owners and its creditors gives the parties until Feb. 1 to submit a “co-exclusive” plan to restructure and settle its debts.

In other words, if the casino company doesn’t submit a plan — with the consent of as many bondholders and other litigants as possible — by the deadline, creditors can submit restructuring plans of their own.

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