Plan has secured creditors taking over Greektown Casino-Hotel

In the next 30 days, it’s possible a new ownership group will control the Greektown Casino-Hotel.

But the identity of that group will remain undisclosed for the time being.

On June 1, attorneys involved with the Chapter 11 bankruptcy proceedings for the casino filed a plan for reorganization in U.S. District Court.

Under terms of the plan, ownership will go to the group of secured creditors, those who have loans backed by liens against the casino’s property, said Charles Moore, senior managing director at Birmingham-based turnaround firm Conway, MacKenzie & Dunleavy, the casino’s lead restructuring adviser.

New York-based Merrill Lynch is the agent for the group of secured creditors, Moore said, but the actual investors or companies in that pool have not yet been disclosed in court filings.

The next step is a July court hearing, which will begin the process of getting votes from creditors for an approval of the reorganization plan, Moore said. At least one class of impaired creditors must approve the plan.

If that is successful, the ownership change must be approved by the Michigan Gaming Control Board.

“If the owners are not approved by the gaming board, then the plan is vacated and we’re back to the drawing board,” Moore said.

The board performs in-depth background checks on people who have any ownership interest in a casino. The ownership will need to be approved by the board, which holds open meetings, so the identity of the secured creditors will likely be made public at that time.

Other options for the casino are still available, however.

A request for bids from investors was issued as part of the bankruptcy process, though the bids were considered too low and were less than the $500 million in secured debt, Moore said.

The total debt on the operation is close to $790 million.

If a higher bid is made, it will still be considered, Moore said.

Another possibility is that one of the previous bidders could decide to team up with the secured creditors in a joint venture, he said.

By Daniel Duggan
5:45 p.m., Jun. 5, 2009
Crains Detroit Business Article