Florida Gaming Corp.(fka FGMGQ)

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FGMGQ may be worth north of $5

http://www.bloomberg.com/news/2013-08-20/jai-alai-operator-seeks-bankruptcy-after-lender-dispute.html?cmpid=yhoo

Jefferies valued the company at $50 million more than what Silvermark LLC was going to pay to acquire them ($180 million versus $130 million). The total shares outstanding even if you convert the preferred stock is 7 million, which would place the current stock price at $7+ if they are able to demand such a premium. Company is profitable-- last quarter they showed an outrageous operating profit of $4 million.

Just because a stock has a Q at the end of it and is going through bankrupcty does not mean it is worthless. General Growth Properties went through bankruptcy had a Q on it, and ended up running from $1 to $20.

Jai-Alai Operator Seeks Bankruptcy After Lender Dispute
By Michael Bathon - Aug 20, 2013 1:12 PM CT

Florida Gaming Centers Inc., which operates a casino and jai-alai frontons in Miami, sought bankruptcy protection after a dispute with its lender.

The company listed debt of $138.3 million and assets of $180 million in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Miami. Its parent, Florida Gaming Corp. (FGMG), and two other affiliates also sought court protection.

Florida Gaming opened a Miami casino in January 2012 to bolster its revenue as the fading popularity of jai-alai, often considered the world’s fastest sport with balls whizzing around sometimes faster than 180 miles per hour, threatened its viability, according to court papers.

The company “is now thriving and is a success by every measure but one: its relationship with its lender,” Daniel Licciardi, an executive vice president, said in court papers. The bankruptcy filing was “brought about by ABC Funding’s relentless effort to wrest control of Miami Jai-Alai and the casino,” he said.

Florida Gaming borrowed $87 million from a syndicate of lenders, led by agent ABC Funding LLC, to repay existing debt and fund the construction of the 60,000-square-foot casino, according to court filings.

Florida Gaming said ABC Funding determined that it was in technical default of the financing agreement and moved to foreclose on its assets. The casino operator said in court papers that it made all required payments.

The casino has more than 1,050 slot machines, a poker room and table games, as well as offering concerts and boxing matches, according to court documents. The company also has a Fort Pierce, Florida, location with jai-alai courts and inter-track wagering on horse and dog racing.

The company previously negotiated a sale of virtually all its assets to fellow casino operator Silvermark LLC for $115 million in cash and $14 million in assumed liabilities, court documents show. A provision in the financing agreement required Florida Gaming to make an additional payment to the lender if the assets are sold to third party. Jefferies LLC was hired to determine that amount, about $26.8 million, and valued the company at more than $180 million.

Florida Gaming said in court papers that the lender delayed the sale in an attempt to get more money and interest and to take ownership of the assets.
‘Best Avenue’

After the sale to Silvermark unraveled, the casino operator decided the bankruptcy filing was the “best avenue to realize and maximize the residual equity in Florida Gaming Centers Inc. -- which may exceed $50 million -- for the benefit of its creditors, shareholders” and other parties, according to court documents.

The company says on its website that it’s the world’s largest jai-alai operator and has been hosting matches since 1926.

The case is In re Florida Gaming Centers Inc., 13-bk-29597, U.S. Bankruptcy Court, Southern District of Florida (Miami).

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at [e-mail]