Thursday, August 6, 2009
Nathan Hurst / The Detroit News
Detroit -- Lawyers for prominent businessman Tom Celani made their first official pitch to take Greektown Casino out of bankruptcy Wednesday, marking his third attempt at taking a piece of the casino.
At a bankruptcy court hearing, lawyers tossed arguments for and against the plan announced last week by Celani of Bloomfield Hills, whose Luna Entertainment firm is based in Novi.
A one-time investor in MotorCity Casino who sold out his stake to Detroit business maven Marian Ilitch in 2005, Celani told The Detroit News last week that he's partnered with Connecticut-based hedge fund Plainfield Asset Management to quietly acquire a $10 million stake in Greektown's pre-bankruptcy debt, a move the partnership says allows them to intervene in the court proceedings to file a plan to exit Chapter 11.
The casino's current owners, the Sault Tribe of Chippewa, sunk the casino in Chapter 11 in May 2008 to ward off threats from the state's gaming regulatory board to force a sale of the property. It had fallen out of compliance with state-mandated debt covenants and secure bankruptcy loans to pay for the final construction of Greektown's permanent casino and hotel complex.
The only other plan before bankruptcy Judge Walter Shapero, which would have to be approved by a number of parties involved in the case and the Michigan Gaming Control Board, would give the casino to a group of secured creditors represented by banking giant Merrill Lynch. Lawyers for the Celani/Plainfield partnership said their plan would use bankruptcy exit financing to pay off secured creditors who put up money for casino's expansion and hotel construction, while offering cash or equity in Greektown to other creditors.
In what was viewed as a victory for Celani, Shapero ordered the businessman to present his detailed plan to the bankruptcy court by Tuesday.
The Sault Tribe would receive nothing in either plan currently before the court.
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