Greektown Casino Files for Chapter 11 Bankruptcy Protection

On May 30th, 2008, the Greektown Casino officials commented that players will not notice any sudden changes and its ongoing $500 million casino expansion project, which includes a hotel facility, will continue despite its filing for bankruptcy protection. Casino officials have also informed their employees that they should not worry about job cuts because they do not plan to dismiss some of their employees even if they filed for bankruptcy.

Greektown Holdings LLC, Greektown Casino LLC and their affiliates for Chapter Eleven Bankruptcy Protection before the U.S. Bankruptcy Court in Detroit after failing to comply with the requirements of the credit line. Casino Management Board Chairman Tom Miller commented in a statement that as they reposition the casino and complete the building of their permanent facility with additional resources, their goal is a larger and more financially viable Greektown Casino.

The casino commented they are finalizing a $150 million in financing with their bank to continue operating the casino and finishing the construction of their expanded gaming floor, which will open this summer and four hundred room hotel facility, which is scheduled to be completed next year.

Greektown Holdings commented in a statement filed before the Bankruptcy Court that they have failed to comply with the loan requirements with Merrill Lynch, Pierce, FennerandSmith Incorporated, which means that they could not get some money from their credit line and made it difficult for the company to get new debt without filing for bankruptcy protection.

That loan was $314.5 million as of March 31st, 2008. The Sault Ste. Marie Tribe of Chippewa Indians is the majority owner of the Greektown Casino, which is one of the casino facilities in Detroit.

Tribal Head Aaron Payment blamed the bankruptcy filing because of the state casino regulators. But Michigan Gaming Control Board executive director Rick Kalm denied Payment’s claim commenting that the state board was not the reason behind the bankruptcy filing of the Greektown Casino.

The board said that they have set a June 10th, 2008 deadline for the Greektown Casino to explain why the state should not force a sale of the casino. The state of Michigan said that the casino facility had not met the state financial goals.