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Monday, March 08, 2010
Courts - "Majestic Star mortgages may be invalid on Ind. casinos"
Another bankruptcy story this morning, this one via Bloomberg News:
The creditors' committee for Majestic Star Casino LLC constructed a theory where secured lenders didn't properly perfect liens on the two riverboat casinos in Indiana.Consequently, the committee filed a motion in bankruptcy court last week asking for authority to file a complaint looking to void the defective mortgages. Majestic Star itself gave up the right to challenge the validity of secured claims in the process of agreeing to financing for the Chapter 11 case that began in November 2009.
Under the committee's theory, the two boats are now "fixtures" rather than "vessels" because they no longer leave the dock. For failure to make requisite "fixture filings," the committee contends the secured claims are in reality unsecured.
A hearing on the motion for permission to sue has been set for March 22 in bankruptcy court in Delaware. The committee is seeking to void liens not only of the first-lien banks but also of the second-lien noteholders. * * *
The case is In re Majestic Star Casino LLC, 09-14136, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Posted by Marcia Oddi on March 8, 2010 11:04 AM
Posted to Courts in general