Florida Gaming Corp.(fka FGMGQ)

[TonyJoe1957]

Miami Jai-Alai Seeks to Keep Grip on Bankruptcy Case
11/21 01:36 PM

Florida Gaming Centers Inc. is seeking to retain sole control of Miami Jai- Alai's Chapter 11 case as it moves to sell the historic South Florida sporting venue and casino at a bankruptcy auction next year.
Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) , Miami Jai-Alai's owner, has agreed to put the casino on the auction block with a proposed sale slated to occur by March of next year. The company is seeking a 120-day extension of its exclusive right to file a Chapter 11 plan in order "to facilitate an orderly, efficient and cost-effective plan process" for the benefit of all creditors and parties in interest, according to a Tuesday filing in U.S. Bankruptcy Court in Miami.
Exclusive periods protect a firm restructuring under Chapter 11 from outsiders who may look to interfere with the reorganization process for their own benefit. Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) is seeking an extension through April 16 to file a plan. Its sole control of its bankruptcy case is set to end Dec. 17, and a hearing to approve the sale will occur by March 31, 2014.
Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) is suing a group of its lenders, alleging they conspired to take over the casino in an "unlawful" and "usurious" loan-to-own scheme, and doesn't want to face the possibility of the lenders getting control of the case.
The lenders in turn have accused Florida Gaming's (FGMGQ:$0.68,00$0.0595,9.59%) owners--William Bennett Collett Jr., his father and other family members--of mismanagement and improper self-dealing.
Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) filed for Chapter 11 protection in September, after an out-of- court deal to sell its assets to New York-based casino operator Silvermark LLC, for about $130 million, failed to close. That would have been enough to pay off lenders led by ABC Funding LLC the $127 million they are owed. The lenders, who include affiliates of investment firms Summit Partners and Canyon Capital Advisors, had sued Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) seeking to foreclose on Miami Jai-Alai and its recently opened casino.
Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) blamed delays caused by the lenders for the failure of the deal to close. According to the company, the lenders aren't actually interested in recovering what they are owed, but want Miami Jai-Alai and its lucrative casino for themselves. A recent estimate by investment bank Jefferies pegged the value of Miami Jai-Alai at more than $180 million, according to court papers.
The lenders say Florida Gaming (FGMGQ:$0.68,00$0.0595,9.59%) doesn't like the deal it cut with Silvermark and is using the lender dispute to get more money at a bankruptcy auction.
The $180 million valuation represents a significant turnaround for a venue and a sport that was all but left for dead a few years ago. The reason for the recovery isn't jai-alai, however, but a 60,000-square-foot casino that opened last year.
Jai-alai is still played six days a week at the Miami fronton, but revenue from betting on the sport provides just a fraction of Florida Gaming's (FGMGQ:$0.68,00$0.0595,9.59%) overall handle, or take. In 2012, Florida Gaming's (FGMGQ:$0.68,00$0.0595,9.59%) revenue surged to $45.5 million from $7.8 million a year before. In the first six months of this year, the casino alone brought in more than $39 million.
Miami Jai-Alai opened in 1926. Over the years, the venue hosted everything from championship fights to junior women's club meetings. The Allman Brothers Band, Aerosmith and Thin Lizzy played "the High," as it was known, in the 1970s. The fronton also had a starring role in television episodes of "Miami Vice" and Anthony Bourdain's travel show.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Patrick Fitzgerald at [e-mail]
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