Monday, February 9, 2009

Leaving the Station

Perhaps you heard about U.S. News and World Report's list of 15 companies that might fail in 2009. I want to focus on one - Station Casinos.

Why? Because that one hits close to home. Well, not close to home, but close to travel. My wife has an elderly relative in Henderson, Nevada who plays bingo at Sunset Station whenever she can, so I've been to Sunset Station often.

Here's what U.S. News and World Report said about Station Casinos:

Station Casinos. (Privately owned, about 14,000 employees). Las Vegas has already been creamed by a biblical real-estate bust, and now it may face the loss of its home-grown gambling joints, too. Station - which runs 15 casinos off the strip that cater to locals - recently failed to make a key interest payment, which is often one of the last steps before a Chapter 11 filing. For once, the house seems likely to lose.

The Las Vegas Business Press has more:

Station Casinos carried $5.4 billion in debt in the third quarter ended Sept. 30, much of it from the November 2007 management-led buyout with Los Angles-based real estate firm Colony Capital.

That leverage puts Station at risk of breaking terms of bank debt, said Peggy Holloway, a Moody's Investors Service analyst.

But there's positive news here and there:

Station Casinos has been asked to temporarily run day-to-day operations of the Thunder Valley Casino by the American Indian tribe which owns the casino, the tribe and casino company confirmed Thursday....

[Tribe spokesman Doug] Elmets said the decision was made by the tribe to ask for Station Casinos' help until more experienced casino executives are hired to manage the economic downturn.

It's quite possible that a bankruptcy might not affect day-to-day operations, but with the economy, you never know.

And Trump Entertainment Resorts Holdings also appears on the U.S. News and World Report list. Although Trump caters to a different crowd.
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