After a lull in Las Vegas gaming bankruptcies, restructuring activity picked up Monday when the owner of Jerry's Nugget casino in North Las Vegas filed for Chapter 11 bankruptcy reorganization and protection.
Under Chapter 11, businesses continue to operate while coming up with a plan to restructure their debt. Creditors can participate in the process and potentially propose their own reorganization plan.
In two bankruptcy filings Monday in Las Vegas, Jerry's Nugget Inc. and sister company Spartan Gaming LLC said the Jerry's Nugget casino on nine acres on Las Vegas Boulevard North is valued as a going concern at at least $8 million.
The casino has 630 slot machines and nine table games along with a sports book, keno area, bingo hall and two restaurants. The property has no hotel. Spartan Gaming owns 12 parcels of real estate in Southern Nevada, the filing says.
The initial court filings said the assets and liabilities of Jerry's Nugget each top $10 million and that the bankruptcy was filed because of multiple financial disputes.
One is with U.S. Bank, which in a lawsuit has been threatening to seek appointment of a receiver to run Jerry's Nugget. Jerry's Nugget said in its filing it disputes claims by U.S. Bank that U.S. Bank is owed $3.6 million.
Another dispute is over claims that Jerry's Nugget is a guarantor of a troubled Mesquite real estate development loan.
Spartan Gaming's filing says its assets and liabilities each top $1 million.
The filing says that as the local economy has been improving, Jerry's Nugget's financial health has been improving as well. Records show net revenue of $22.5 million in 2011 was down from $23.3 million in 2010. But Jerry's Nugget said in its filing that revenue this year should reach $23.6 million and that EBITDA will be about $1.64 million.
EBITDA is a key performance measure for casinos meaning earnings before interest, taxes, depreciation and amortization.
Before Monday's filing, the last significant casino bankruptcy filing in Las Vegas involved Hooters on Aug. 1, 2011.
Earlier restructurings during the recession involved Tropicana Entertainment LLC, Herbst Gaming, Station Casinos, Black Gaming, Riviera Holdings and Fontainebleau Las Vegas.
Jerry's Nugget and Spartan Gaming are represented in the bankruptcies by the Las Vegas law firm Gordon Silver.