Station Casinos may file bankruptcy

The Las Vegas gaming company bankrolling plans to build a casino resort on the western edge of Rohnert Park warned creditors it may file bankruptcy and asked them to support a proposal to restructure its debt.

Station Casinos Inc. unveiled a plan late Tuesday to inject up to $244 million in cash into the company if bondholders agree to participate in a prepackaged bankruptcy filing.

The company?s financial condition raises new questions about the future of its plans to build a casino in Rohnert Park in partnership with a Sonoma County Indian tribe. The project, proposed by the Federated Indians of Graton Rancheria, has been stalled for five years by a protracted federal environmental review and more recently a legal challenge by opponents.

?This company is bleeding money,? Chip Worthington, a pastor who founded Stop the Casino 101 Coalition, said in a statement. ?With no customers coming in the doors of its casinos, how long can Station Casinos last??

Representatives of the Graton Rancheria and Station Casinos could not be reached for comment late Wednesday.

The company owns 15 casinos in Las Vegas and surrounding suburbs, and owns half of four other casinos in the area. It also manages Thunder Valley Casino near Sacramento on behalf of the United Auburn Indian Community.

Its operations in Las Vegas, like other casino companies in Nevada, have been hard hit by the economic downturn and a drop in gambling revenue.

Frank Fertitta III, chief executive of Station Casinos, expressed confidence that the plan to reduce the company?s debt and interest costs would leave the company ?well-positioned for the future.?

?We believe the proposed restructuring plan is in the best interest of all our constituents,? Fertitta said in a statement.

Under the plan, known as a prepackaged bankruptcy, Station?s parent company would file for Chapter 11 bankruptcy protection in court under a plan prepared in cooperation with lenders, according to the Las Vegas Sun. Bondholders would vote on the plan before the bankruptcy filing, expediting the process.

The company could emerge from bankruptcy by summer, the Sun reported.

Station Casinos said creditors must approve the plan by March 2 or the company may default on $450 million in debt, which could trigger defaults on its other outstanding notes.

Station did not make a scheduled $14.6 million interest payment Monday on $450 million in notes, which are due in 2014. The company said it had $350 million in cash on hand Jan. 31 to pay expenses and fund operations.

Station Casinos went private in November 2007 after shareholders agreed to a plan to sell the company to the founding Fertitta family and Colony Capital LLC for $5.4 billion. The new owners assumed $3.4 billion in debt in the buyout.

Moody?s Investors Service downgraded its debt rating for Station Casinos, already below investment grade, in response to the announcement.

The Associated Press contributed to this story.