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DETROIT - Greektown Casino filed for Chapter 11 bankruptcy this week as the Sault Ste. Marie Tribe of Chippewa Indians seek more time to reorganize its financing and block the Michigan Gaming Control Board from forcing a sale of the casino.
Greektown's financial status have been in under tough scrutiny for months from the Michigan Gaming Control Board, which requires the casino to maintain a 6.5-to-1 debt-to-earnings ratio as part of loan covenants agreed to in late 2005.
Tribe Chairman Aaron Payment said the gaming board has unfairly levied debt requirements on Greektown. "We have filed for Chapter 11 to protect our assets from the unfair covenants placed upon Greektown Casino by the Michigan Gaming Control Board, a standard that the other two casinos in Detroit (MGM Grand Detroit and MotorCity Casino) do not have to follow. At this point, I'm at a loss as to why we're being held to something."
Greektown spokesman Roger Martin said the casino is working to secure another $150 million in financing to help continue operations and complete the casino-hotel project.
"As we reorganize our business and complete our permanent casino construction with additional financing, the goal is a bigger and more viable Greektown Casino," said casino Management Board Chairman Tom Miller, who is also a member of the Sault Tribe Board of Directors. "As we work through the reorganization process, the casino will continue to operate normally for all guests, player's club members, employees, vendors, suppliers and contractors."
In the Chapter 11 petitions filed in U.S. Bankruptcy Court in Detroit, the Greektown and seven affiliates listed debt of $100 million to $500 million, and assets of less than $50,000.
Revenues in 2007 were $314.6 million with a net income of $2 million. Revenues since the January 1, 2008 are $80.5 million.
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