Casino news source: The Clarion Ledger - http://www.clarionledger.com/
Hard Rock Casino Biloxi parent files bankruptcy
Move executed to access Katrina-related insurance proceeds to rebuild the hotel and gaming resort
By Nell floyd
nfloyd@jackson.gannett.com
The parent company of Hard Rock Hotel & Casino Biloxi filed for bankruptcy Tuesday in Gulfport to access its Katrina-related insurance proceeds and rebuild.
The resort was days away from opening when Hurricane Katrina on Aug. 29, 2005, destroying the casino and damaging another building, the hotel tower and parking garage.
Premier Entertainment Biloxi LLC has collected more than $160 million in Katrina-related insurance proceeds, which is enough to pay its creditors in full and rebuild the casino resort. But the company's bondholders have refused to allow Premier Entertainment access to most of the money, according to the bankruptcy motion.
Lawrence Hershfield, chairman of the board of Premier Entertainment Biloxi, said in a release that the company has sufficient resources to pay all its creditors in full and rebuild the casino, but the company's bondholders refuse to allow the company to use its own money. Bondholders allege the company is in default because it failed to re-open the resort by Dec. 31.
"The board of the company has concluded that the quickest way to get access to our cash is to use a bankruptcy reorganization process," Hershfield said.
In April, a subsidiary of Leucadia National Corp., LUK Ranch Entertainment, acquired an interest in Premier Entertainment Biloxi and made numerous offers to the bondholders, but none was accepted, according to the bankruptcy motion
The bankruptcy is not expected to delay the resort's rebuilding schedule. Plans are to open in the third quarter of 2007.Larry Gregory, executive director of the Mississippi Gaming Commission, said he was notified about the decision to file for bankruptcy.
"This is not anything for anyone to have concerns about," he said. "It's a reorganization and a mechanism to get the project on track without being tied up in the federal court system. I think the state will be better off by having the casino rebuilt and all the vendors getting paid."
Premier Entertainment Biloxi intends to fully repay its creditors and will not submit or support any plan that proposes otherwise, according to the bankruptcy motion.
"Every legal action this company has taken since Katrina has been with a view of allowing vendors to get paid. This action is no different," said Joe Billhimer, president of Hard Rock Hotel & Casino Biloxi.
Creditors holding unsecured claims include International Gaming Technology in Chicago; Hard Rock Cafe international in Orlando, Fla.; BellSouth Communication Systems in Baltimore; Associated Food Equipment in Gulfport; Reigstad & Associates in Biloxi; AC Coin & Slot Service Co. in Pleasantville, N.J.; Cintas Corp. in Harahan, La.; Shuffle Master Inc. in Las Vegas; All Phase Electric Supply in Gulfport.
Creditors with unsecured claims also include The Peoples Bank in Biloxi; Technomedia Solutions LLC in Orlando; Glory USA Inc. in Harahan, La.; Young Electric Sign Co. in Tacoma, Wash.; Banc of America in Chicago; Duane Morris LLP in Philadelphia, Pa.; Rotolo Consultants in Slidell, La.; Prime Technology Systems in D'Iberville; Commercial Millwork Specialists in Gulfport; and Micros Systems in Las Vegas.
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