5.13.08
Greektown Casino given until June 10 to avoid forced sale
Nathan Hurst / The Detroit News
DETROIT -- Just days after announcing a $100 million cash infusion from a new Metro Detroit investment group, Greektown Casino was told it has until June 10 to come up with a convincing argument why the Michigan Gaming Control Board should not force casino owners to sell the gaming hall.
The board's demands could threaten a deal announced last week by Entertainment Interests Group to invest some much-needed cash into Greektown. The group agreed to buy a 40 percent stake in the casino for $79 million, and invest another $21 million to pay off former minority investors. Sault Tribe of Chippewa would have a 60 percent stake in Greektown.
At the monthly meeting of the board Tuesday, Greektown officials requested that the board waive enforcement of requirements that the casino maintain a certain debt-to-earnings ratio. The casino hasn't met that requirement since November, and that failure allows the gaming board to force the casino's sale.
The board denied the waiver request, with Chairman Damian Kassab suggesting that Greektown revisit its deal with Entertainment Interests Group. Kassab noted the $100 million would satisfy the debt-to-equity requirements only through part of 2008.
Richard Zussman, a lawyer for Entertainment Interests Group, told the board that a denial of the waiver could jeopardize the transaction. The investment group is headed by Jerry D. Campbell, former chairman of Republic Bancorp and developer of Pinnacle Race Course in Huron Township.
"We are hesitant to continue spending time and money to close this deal," Zussman said. "We'd have to think seriously about moving forward."
The gaming board requires Greektown to maintain a debt-to-earnings ratio of 6.25 to 1 -- meaning that for every $6.25 in debt the casino must show $1 in equity. The casino has been in violation of that ratio late last year and had until April 30 to shore up their finances.
Zussman wouldn't elaborate on his comments following the close of the board's meeting, but Aaron Payment, chairman of the Sault Tribe, said Zussman's comments caught him off guard and shouldn't be taken as an indication that Campbell and his partners intend to pull their offer from the table.
"I am very confident that this deal will move forward," Payment said.
You can reach Nathan Hurst at (313) 222-2293 or nhurst@detnews.com.
Nathan Hurst / The Detroit News
DETROIT -- Just days after announcing a $100 million cash infusion from a new Metro Detroit investment group, Greektown Casino was told it has until June 10 to come up with a convincing argument why the Michigan Gaming Control Board should not force casino owners to sell the gaming hall.
The board's demands could threaten a deal announced last week by Entertainment Interests Group to invest some much-needed cash into Greektown. The group agreed to buy a 40 percent stake in the casino for $79 million, and invest another $21 million to pay off former minority investors. Sault Tribe of Chippewa would have a 60 percent stake in Greektown.
At the monthly meeting of the board Tuesday, Greektown officials requested that the board waive enforcement of requirements that the casino maintain a certain debt-to-earnings ratio. The casino hasn't met that requirement since November, and that failure allows the gaming board to force the casino's sale.
The board denied the waiver request, with Chairman Damian Kassab suggesting that Greektown revisit its deal with Entertainment Interests Group. Kassab noted the $100 million would satisfy the debt-to-equity requirements only through part of 2008.
Richard Zussman, a lawyer for Entertainment Interests Group, told the board that a denial of the waiver could jeopardize the transaction. The investment group is headed by Jerry D. Campbell, former chairman of Republic Bancorp and developer of Pinnacle Race Course in Huron Township.
"We are hesitant to continue spending time and money to close this deal," Zussman said. "We'd have to think seriously about moving forward."
The gaming board requires Greektown to maintain a debt-to-earnings ratio of 6.25 to 1 -- meaning that for every $6.25 in debt the casino must show $1 in equity. The casino has been in violation of that ratio late last year and had until April 30 to shore up their finances.
Zussman wouldn't elaborate on his comments following the close of the board's meeting, but Aaron Payment, chairman of the Sault Tribe, said Zussman's comments caught him off guard and shouldn't be taken as an indication that Campbell and his partners intend to pull their offer from the table.
"I am very confident that this deal will move forward," Payment said.
You can reach Nathan Hurst at (313) 222-2293 or nhurst@detnews.com.
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