Two Way Hard Three | Las Vegas Casino & Design Blog

August 6, 2010

Station Lands With Fertittas - For The Best?

Posted by Hunter

A bankruptcy judge has ruled that the Fertitta family will retain ownership of most of the assets of Station Casinos, Inc.

This was not really unexpected but I have to wonder - is this what 'should' have happened?

Clearly the Fertittas created a powerful empire over the last 20 years in Las Vegas but at the same time, they're at least partially responsible for the mess that the company is in now. Of course, the economy took a dirt nap in 2007 but it was their policies that left the company exposed and vulnerable, leading to a bankruptcy filing that wiped out billions of investor dollars.

If Boyd Gaming is to be believed, the bidding process heavily favored the insiders, partially due to some fine print related to the land under Texas Station. What really amazes me is that Colony Capital stuck by these guys through this whole thing given how much money they lost.

Even if it seems a bit slanted, it's hard not admire the ruthlessness of the Fertitta brothers in this whole thing. Where else but Vegas can you lose billions and end up on top? Ok, I guess Wall Street... and Washington... and maybe across the Valley at CityCenter... oh well.


Read archived comments (5 so far)
August 6, 2010 2:27 PM Posted by mike_ch

If you're reading McKee's blog, he's been writing a lot about this deal. It's hard to call it corruption, per se, but the judge has been about as accommodating as possible to Stations management in terms of helping them keep the status quo.

It's some pretty naked courtroom politics, but the kind that seems to be pretty common in Nevada.

August 6, 2010 2:37 PM Posted by parchedearth

I have been shocked at every step in this bankruptcy process. Best case at the outset, the Fertitta's should have been left with a small equity stake and management of a couple properties.

I agree that Colony held all the cards and just folded on this. I wonder what the thousands of investors in Colony's capital pools think about the beating they just got. Of course, this isn't the only Colony investment that went bust.

There could have been 20+ different bidders, if the judge had broken up the company and auctioned off individual pieces.

Boyd doesn't have clean hands either since their money was Echelon debt that should have been returned to the banks when that project was cancelled.

August 6, 2010 3:07 PM Posted by Dave

Looking a little deeper, I'm surprised that anyone is so optimistic about the LV locals market that they'd want to keep the entire portfolio. I'll give the Fertittas credit for not just walking off into the sunset, which many people might have done.

August 7, 2010 8:03 PM Posted by worldpool

I am glade that this happy station casinos got everything back and hopefully they will be a better company

August 11, 2010 12:09 PM Posted by Jason

Although probably a bias and inside decision, anyone who's been in las vegas for 30+ years knows that the Fertittas are great people and truly care about the little guys. Unlike the corporate Jack Holes that run the strip.