Bondholders for Station Casinos are trying to protect themselves through the bankruptcy, where they will suffer a significant loss in investments. Bondholders recently revealed that if the bankruptcy were to happen then they would in turn file lawsuits dating back to the multibillion-dollar buyout that occurred in 2007.
According to these bondholders there holding responsible charges of bankruptcy for the buyout stating that it was the catalyst thereby causing the company to go under. In creating this preventative lawsuit the bondholders are hoping to stop creditors and decrease the risk of them losing their investments. Currently an objection has been filed by these investors with the U.S. Bankruptcy Court in Reno, Nevada.
At this point Station casinos is trying to prevent the committee of bondholders from investigating the buyout as well as trying to cover their own backs and be proactive about preventing lawsuits against the casinos.
According to the court filing, the committee claims that the $5.8 billion buyout goes against the Nevada uniform fraudulent act as it used to Station casinos “to the hilt on four of its most valuable properties, leaving (Station Casinos) and its creditors questionable benefit in return, while insiders of the (company) benefited immensely.”
The bondholders of the casino are within their rights if they can prove that Station casinos with fraudulent with the buyout and are no longer able to meet future obligations. This we difficult thing to prove as they have to find evidence that states that the buyout was the reason that they are without capital at this point.
On the side of the bondholders, is evidence that the buyout use red rock resort, Sunset Station, Palace Station in Boulder Station casinos as leverage against the $2.475 billion buyout.
According to the court filing against Station casinos, “While further investigation is certainly required There are undeniably substantial issues that must be addressed concerning whether the (buyout) transactions involved constructive and, or actual fraudulent transfers.”
