Porto, Portugal: There are problems at Hooters casino in Las Vegas. It is common knowledge that Hooters have been suffering heavy losses for a while now. This casino has recently even filed for bankruptcy. The main creditor of Hooters casino, Canpartners Reality Holding Co., says that the casino will soon be foreclosed. But Hooters casino disputes creditor claims. They are saying that the investors are trying to profit from their misfortunes.
Hooters have filed for Chapter 11 bankruptcy. This offers them protection against an imminent foreclosure. But, Canpartners is not buying any of this. A part of the Canyon Capital Reality Advisors, Canpartners, is saying that Hooters have failed to succeed even after repeated attempts. They are even saying that recent attempts for reorganizing the operations are unrealistic. These steps will never work. As investors, they are asking to take out their investments. They are proposing to foreclose the casino to do this. Canpartners feels that Hooters cannot get capital to bail them out from the current crisis. Foreclosure seems to the only option left, according to Canpartners at least.
The Hooters casino is in a lot of debt at this time. The current debt stands at 180 million dollars, whereas the property is valued at a mere 70 million dollars. This is why the investors are saying that no form of fresh investment can bail out Hooters, even if they can arrange for an alternative source of investment. Canpartners is saying that if this foreclosure is prevented, it could ruin their financial position as well. It is therefore important for their financial health.
Hooters casino does not however agree with this view. They say that it is wrong to arrive at the conclusion that restructuring will not work, even before it is tried. But Canpartners says that it is in no position to agree about any fresh proposals. The court must end all proceedings, they are saying. Canpartners is even proposing to use their veto power, which is allowed to an investor under Chapter 11 bankruptcy laws. Hooters, on the other hand, feel that this should never be so easy. A business cannot be started or ended with a simple thumb’s up or down.
It has turned ugly, as Canpartners accuse Hooters of increasing the salaries of their CEO and President. Hooters casino is not agreeing to this. They are saying that salaries have not been increases in the last five years.
Industry observers are taking stock of this latest development. As Hooters casino disputes creditor claims, they are keenly watching this latest controversy. A lot of casinos in Las Vegas have suffered greatly in recent times. It is worse in Atlantic City. Online gambling websites are killing off these casinos too. The poor economic condition and high unemployment rates are certainly contributing to the problem as well.
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