Circus and Eldorado Joint Venture (the "Partnership") today announced that the Partnership has entered into a settlement agreement that paves the way for the Partnership to obtain confirmation of its proposed consensual chapter 11 plan of reorganization (the "Plan") and entered into a commitment letter (the "Commitment Letter") with Wells Fargo and certain of its affiliates for a new $70 million senior secured credit facility (the "New Credit Facility") to provide a portion of the exit financing associated with the Plan. Under the settlement agreement, which is subject to court approval, the two largest holders of the Partnership's 10 1/8% Mortgage Notes due 2012 (the "Notes"), along with the indenture trustee for the Notes, have agreed to support the prompt confirmation and consummation of the Plan. The terms of the Plan provide that the unsecured creditors of the Partnership will be paid in full and the holders of the Notes will receive a combination of cash from the Partnership, its partners (an affiliate of MGM Resorts International and Eldorado Resorts LLC) and borrowings under the New Credit Facility – and new second lien notes. A confirmation hearing on the Plan is scheduled with the bankruptcy court on October 22, 2012.
The Plan now has the overwhelming support of the Partnership's creditors. The Plan received unanimous support from the unsecured creditors that voted on the Plan, and, including the support garnered under the settlement agreement, approximately 85% of the Noteholders are now in favor of the Plan.
"We are excited that all the litigation in our case has settled and that we have obtained a commitment for a new credit facility. We are looking forward to Silver Legacy's future as a financially stronger company." said Gary Carano, chief executive officer of the Partnership. "We are grateful for the support of our partners, team members, players, guests, vendors and the community through our restructuring and look forward to continuing to provide the same exceptional experience that our players and guests have come to expect from the Silver Legacy. Our partners, the Carano family and an affiliate of MGM Resorts International, have demonstrated their commitment to the Reno community and our 1,800 team members throughout this process. The reorganization plan affirms there will be no changes to Silver Legacy's operations, management team or partnership structure. It is a great day for Silver Legacy!"
The proposed settlement and consummation of the Plan and the New Credit Facility are subject to the satisfaction of certain conditions, including (i) approval by the court presiding over the Partnership's chapter 11 case, and (ii) the satisfaction of the conditions set forth in the Commitment Letter.