Station Casinos wins approval for bankruptcy exit plan with Fertitta sale

Before the company can close the sales and exit bankruptcy, it must win approval from Nevada gambling regulators, Station spokeswoman Lori Nelson said in an interview last week. “The implementation of this plan will make us a much stronger and healthier company going forward,” Executive Vice President Scott Nielson said in an e-mailed statement.

Station may leave bankruptcy early in 2011, Nelson said. The company filed bankruptcy last year in Reno, Nevada. Station’s reorganization involves breaking the Las Vegas- based company into two parts, both of which would be taken over and reassembled by Fertitta, his brother, Vice Chairman Lorenzo Fertitta, and their partners, which include some company lenders.

Companies, including Boyd Gaming, declined to bid in a court-supervised auction after Station announced a settlement with bondholders in July.

Before Station’s bankruptcy filing, creditors rejected a proposal that would have allowed the Fertittas and Tom Barrack’s Colony Capital to retain control. According to court records, at least us$ 1.7 billion of Station’s debt was the result of a leveraged buyout in November 2007 by Fertitta Colony Partners.

The Fertitta brothers’ fortune increased with the Station Casino buyout and from their ownership of the Ultimate Fighting Championship, a mixed martial arts contest featuring The Octagon, an eight-sided competition cage.

Las Vegas-based UFC, which produces pay-per-view events and live arena fights, doesn’t disclose its earnings. The Fertittas own UFC with Dana White, and in January sold a minority stake to Flash Entertainment, an events consultant owned by the Emirate of Abu Dhabi’s government.

Station started as a Las Vegas bingo hall in 1976 and grew into a casino company focused on attracting gamblers who live and work in Nevada’s Clark County, where the population more than doubled between 1990 and 2006. The case is In re Station Casinos, 09-52477, U.S. Bankruptcy Court, District of Nevada (Reno).