Friday, July 11, 2008

Read Barden & Bluhm's Casino Pitch

ere's a summary of the the filing before the Gaming Control Board by Don Barden and the prospective new Pittsburgh casino owners, including Neil Bluhm. Much of what you'll read below are direct quotes and key phrases from their written submission. By the way, it appears the casino won't be called "Majestic Star" under the proposed new partnership. The name of the ownership group itself hasn't been finalized either.

PITG and "Holdings Acquisition Co", a newly formed limited partnership are applying to the gaming board for a proposed reorganizing and resulting change of control and re-capitalization. This would be a change of control of the Pittsburgh slots license.

PITG has been unable to secure permanent financing.
It's bridge lenders have notified PITG they believe it is in default and they may "exercise default remedies" that would have a material, detrimental impact on the development and completion of the contract.

Walton Steet Capitol would make an equity contribution of $120 Million to be used to complete the project.

"Holdings" would become the new licensee that develop, own, and operate the project. The initial owners of Holdings would be a Walton controlled partnership and a partnership consisting of Greg Carlin and certain family members of Neil Bluhm to be known as "High Pitt Gaming".

PITG would contribute assets and certain liabilities to Holdings in exchange for partnership interests in an affiliate of Holdings.

Upon closing, Don Barden will be a prinicpal licensee and indirect owner of "Holdings".

Management of Holdings would be a management committee. Comprised of Don Barden and the following representatives of the investor group:
Greg Carlin, Andrew. Bluhm, and Neil G Bluhm, each of whom would be licensed as a principal.

The proposed transaction is "reorganization and recapitalization of a distressed project" that has "been unable to secure permanent financing on its own to continue the development of the project".

"It has been publicly disclosed by the bridge lenders that they believe the current bridge financing to be in default and intend to take actions to protect their interests"

"Under a best case scenario....(that)..would result in disruption of construction at the site and significant delays in the completion and opening of the project ".

"The goal of the proposed transaction is to rescue a struggling project...".

"..... A new equity infusion and substantial permanent debt financing are needed in a timely manner in order to continue and ultimately complete construction".

The project is subject to material negative default actions from the existing bridge lenders.

"As part of the proposed transaction, Holdings will honor the conditions of the licensure imposed on PITG... Including obligations to citizens of Pittsburgh....".

"Such obligations in aggregate will cost approximately. $9 Million per year".


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