Possible Bankruptcy for Hooters Casino, Las Vegas
The Hooters Casino in Las Vegas, owned by the cheesecake and chicken-wing restaurant chain, may be heading toward a possible default with the possibility of Chapter 11 bankruptcy.
The 696-room casino resort missed the deadline for a $5.7 million debt payment on Wednesday, so they hired Jefferies & Co. to come up with financial options. There is a 30-day grace period in which the company can make the payment; otherwise they will be faced with the entire $150 million debt being due.
However, chief executive Neil Kiefer says they were holding back money due to the poor economic circumstances. "We've never missed a payment,” he said. “We're current on all our bills and we have not laid anybody off. We've held back to preserve cash because the outlook in Las Vegas for 2009 had not improved."
Things haven’t been looking very good for the company recently, however, having maxed out its short-term credit lines and $8 million in cash. Moody's Investors Service two weeks ago put the casino's junk bond debt on a list of 283 issues most likely to default. In addition, they lost $13 million in 2008 after getting $46 million in debt since its opening back in 2006.