he company expects to use the Chapter 11 process to continue discussions with its senior secured lenders and note holders with the goal of reaching a comprehensive debt restructuring agreement that will strengthen the company's balance sheet.
The firm has strong operating cash flow and sufficient liquidity to meet its ongoing obligations and to continue operating its hotels and casinos across the country without interruption. It has taken steps to minimize the impact of the Chapter 11 process on its team members and customers, and to ensure that it can continue to do business with its suppliers and business partners on normal terms during this process.
"We believe this is a necessary step that is in the best interest of the Company because it will allow us to implement a debt restructuring in a controlled process while we continue to run our casino properties as usual," said Don H. Barden, the company's Chairman, President and CEO. "Although we continue to generate good cash flows and maintain solid cash reserves, we are facing challenging conditions in our industry with decreased gaming activity. In this economic environment our debt level is not sustainable, and we determined it was necessary to restructure our debt so that we are best positioned to take full advantage of the strength of our operations."
Barden emphasized that the Chapter 11 restructuring should not affect the day-to-day operations at the Company's hotels and casinos. "We are committed to continuing to serve our visitors and guests, and to providing them with the same superior hospitality, entertainment and gaming experiences that we always have," he said. "We will continue to offer our normal reward programs, events and promotions at all of our properties."
Similarly, Majestic Star Casino expects there will be no impact on team members and its ongoing relationship with suppliers. The Company has asked the Court for approval of several "first day" motions that will allow the Company to continue to manage its operations in the ordinary course, and expects the Court to approve these requests in the next day or two. This will ensure that team members will continue to be paid and receive their benefits without interruption. It will also allow the Company to pay suppliers on normal terms for goods and services provided during the Chapter 11 process.
"I would like to thank our guests and suppliers for their continued support during this process. We value our relationships with them and look forward to continuing those relationships for many years to come," said Barden. "We also appreciate the loyalty and support of our team members. Their dedication and hard work are critical to our success and to the future of the Company. Our senior management team is committed to making this financial restructuring successful, and we are confident that it will position the Company for a bright future."
The company is being advised by its legal counsel, Kirkland & Ellis LLP, and its financial advisor XRoads Solutions Group, LLC. The Company's Chapter 11 petitions were filed in the United States Bankruptcy Court for the District of Delaware. Additional information regarding the Chapter 11 case, including access to Court documents, is available at http://chapter11.epiqsystems.com/majestic.