Riviera Holdings Corp., the owner of the Riviera Hotel & Casino in Las Vegas and two affiliated companies, filed for bankruptcy court protection under Chapter 11 in Nevada, with listed assets and liabilities of US $100 million to US $500 million respectively, in U.S. Bankruptcy Court, Las Vegas, District of Nevada, with case file Riviera Holdings Corp. 10-22910. The companies filed under Chapter 11, which allows them to continue operating while they go through bankruptcy proceedings.

In a statement signed by Tullio Marchionne, the company’s general counsel, Riviera Holdings said that it has a restructuring agreement with the lenders who hold the majority of the secured claims under a US $228 million credit agreement, adding that by “agreeing with our secured lenders in advance, we will be able to proceed with an expeditious restructuring through bankruptcy which will provide us with a viable capital structure, as well as additional financing,”

Also filing for bankruptcy protection were Riviera Operating Corp., which does business as the Riviera Hotel on the Strip, and Riviera Black Hawk, which does business as the Riviera Black Hawk Casino in Colorado. Marchionne added: "When we come out (of Chapter 11), the company will be a lot stronger and ready to turn a new page."

Riviera Holdings has a total of 1,300 employees, including 260 in Colorado, and Marchionne said the company will continue to pay employees and vendors and honour customer deposits, adding that the Riviera is already down to its "fighting weight" and expects no further layoffs. The Riviera group is the third major casino operation to seek bankruptcy shelter during the current recession, after Herbst Gaming and Station Casinos.

This is the third time that the 55-year-old Strip casino has filed for bankruptcy protection. In 1997, Riviera Holdings Chairman William Westerman, who died last April, took the company public with shares trading on the American Stock Exchange, and oversaw the expansion of the properties' casino facilities, and construction of the Rivera Black Hawk Casino in Colorado in 2000.

The Riviera sits on 26 acres of Strip prime real estate, close to the new developments by Wynn Resorts, and has received several buyout overtures in the past years. The current economic climate and the current downward trend of Las Vegas revenue have inhibited new bids of late. (E-07.14.10)

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