Fitzgeralds Parent Company Sounds Bankruptcy Alarm

The parent company of Fitzgeralds Tunica warned this week that it may have no other option than to file for bankruptcy.

Majestic Star Casino Capital Corp., which owns properties in Mississippi, Indiana and Colorado, in a filing with the U.S. Securities and Exchange Commission on Tuesday said it will not make a debt payment due April 15 after having missed a prior debt payment in October. The company’s debts total $579.9 million, according to the filing.

“We have been in discussions with ad hoc committees of our creditors regarding a restructuring of our debt given the event of default that now exists under our debt obligations,” the company said in the filing. “Current valuations for regional gaming companies such as ours, the weak economic environment, our diminishing cash flows and the reduced availablility of debt and equity capital in the U.S. markets create a significant risk that we will be unable to implement such a restructuring outside of protection under Chapter 11 of the U.S. Bankruptcy Code. In addition, our creditors may involuntarily file a bankruptcy petition for us.”

A Chapter 11 bankruptcy could allow the casino company to reorganize its debt and keep operating.

The company had an operating loss of $87.4 million for the year ended Dec. 31, compared to operating income of $35 million for the prior year.

At the Tunica property, casino revenues decreased $7 million for the year, the company reported.

As of Dec. 31, the number of people working at the casino and hotel was 916, according to Mississippi Gaming Commission records. The organization reported 1,103 employees the previous year, the records show.

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