LAS VEGAS Riviera Holdings Corp., parent company of the 2,075-key Riviera Hotel & Resort on the Las Vegas Strip, has filed for bankruptcy. It is the company’s third such filing in three decades, most recently emerging from bankruptcy in 1993.
Sister property Riviera Black Hawk Casino, Colorado, also has filed for bankruptcy protection. Both properties will continue to operate during bankruptcy proceedings.
Riviera Holdings General Counsel Tullio Marchionne blames the bankruptcy filing on the poor economy, which has hit the gaming industry unexpectedly hard. However, Marchionne says Riviera is generating positive cash flow and that the company expects to continue to pay its operating costs and meet its maintenance capital expeditures.
“We believe that by restructuring our debt in coordination with our lenders, we will emerge with a capital structure which will enable the company not only to survive, but to grow as the economy recovers,” Marchionne says. “We appreciate all of the hard work that our management and employees have provided and will continue to provide in helping us move forward towards this bright future. We are grateful that our working relationships with our suppliers, vendors, and other parties remain resolute.”
In February, Starwood Capital Group CEO Barry Sternlicht commented on plans to acquire Riviera via prepackaged bankruptcy. Starwood Capital bought control of Riviera’s first mortgage for about 50 cents on the dollar and is leading creditors negotiating a pre-packaged bankruptcy. Sternlicht has since remained mum about his pursuit of Riviera.