DiamondJacks casinos have $125M price tagBankruptcy filings reveal more than $412,000 in claims
Published 11:29 am Friday, August 3, 2012
Debts to a contract housecleaning service and gaming equipment-makers are among DiamondJacks Casino’s biggest creditors in its parent company’s bankruptcy filing, a process top corporate and local executives say is the best way to keep the place open.
Legends Gaming filed for Chapter 11 in U.S. Bankruptcy Court in Shreveport Tuesday. The filing involves transfer of DiamondJacks casinos, hotels and ancillary buildings in Vicksburg and Bossier City to Oklahoma-based Global Gaming Solutions LLC, which is owned by the Chickasaw Nation.
The purchase price of all Legends’ assets and liabilities is $125 million, said Kym Koch, a spokeswoman for Global. The deal hinges on regulatory approvals in Louisiana and Mississippi.
Tops among more than $412,000 in unsecured claims listed in court papers are FSS-The Service Companies, a Miami-based cleaning service hired often by the gaming industry, owed $50,084.86, and Chicago-based equipment-maker IGT, owed $49,452.99. The list also includes BancorpSouth, AT&T and a photography business in Tallulah.
All 339 or so jobs at the Vicksburg casino are safe, officials of both Legends and Global contend.
“(The transition) should be pretty transparent,” said Felicia Gavin, executive vice president and general manager of DiamondJacks in Vicksburg, at 3990 Washington St. “It’s a win-win situation for Global and our team members.”
G. Dan Marshall, an outgoing member of Legends’ board of directors and formerly its chief financial officer, said “a series of events” formed the company’s decision to file bankruptcy to sell the properties. Its Bossier City casino had the lowest revenue in the Shreveport-Bossier gaming market in the first half of 2012. Mississippi does not release revenue updates from individual casinos. The Vicksburg casino was closed for 36 days during the Mississippi River Flood of 2011, which affected its bottom line.
“Certainly, the flood didn’t help,” Marshall said. He declined to discuss reasons beyond what’s listed in court papers. “(The filing) was in the best interest of the customers, team members and everyone.”
If approved by the court and gaming officials, it would be the Chickasaws’ first holding in either state. The tribe owns Remington Park casino and race track in Oklahoma City and Lone Star Park racetrack in Grand Prairie, Texas. DiamondJacks would still pay revenue taxes to the state and property taxes to Vicksburg and Warren County because the land is not held in trust by the Bureau of Indian Affairs, as is Pearl River Resort in Neshoba County, owned by the Mississippi Band of Choctaw Indians and exempt from reporting revenues.
The Choctaw complex is the state’s only Native American gaming facility, situated on lands taken in trust prior to 1988, said Allen Godfrey, executive director of the Mississippi Gaming Commission. Any buyer for DiamondJacks will be subject to state law and not fall under the Bureau of Indian Affairs, Godfrey said.
DiamondJacks was Vicksburg’s first casino in 1993, when it opened as Isle of Capri. In 2006, it and the casino in Bossier City were sold to privately held Legends, which changed the names of both properties. The company had filed bankruptcy in 2008 to lower interest rates on $215 million in loans secured when the casinos were purchased.
Ameristar, Rainbow and Riverwalk round out Vicksburg’s riverfront casino landscape. A fifth, Grand Station, closed March 28 amid its own bankruptcy, which is still unresolved.