Griffin Casino Company Wins Court OK to Restructure Debt

Resorts International moved closer to emerging from bankruptcy proceedings early today when a judge approved a restructuring plan that would allow entertainer Merv Griffin’s casino company to shed some of its massive debt.

U.S. Bankruptcy Judge Rosemary Gambardella approved a plan to give bondholders 78% of the company, dropping Griffin’s stake to 21.5%, said Resorts attorney Stephen Kaplan.

The plan was filed in December under Chapter 11 of the U.S. Bankruptcy Code and amended in April to include the proposed sale of Resorts’ Paradise Island operations in the Bahamas.

Resorts would exchange the $911 million in debt held by bondholders for new notes totaling $434 million, eliminating more than half of the casino company’s debt.

The plan had been overwhelmingly approved by bondholders but must still be approved by the state Casino Control Commission and the Bahamian government.

Last week, the commission approved Resorts’ draft documents concerning ownership restructuring, the transfer of securities, the shift of Resorts to a publicly traded company and Resorts President David Hanlon’s employment contract.

The panel, which declined to rule on the plan until Gambardella released her decision, met to consider the matter today.