Published: Wednesday, November 8, 1995
Byline: By TYLER BRIDGES Staff writer
In the latest legal maneuver surrounding Christopher Hemmeter's failed New Orleans riverboat casino, the casino's parent company Tuesday filed for bankruptcy in Delaware federal court.
The filing mainly involves the riverboat casino and two small Colorado casinos owned by the company, Denver-based Hemmeter Enterprises, and does not involve Hemmeter's one-third share in the Harrah's Jazz Co. casino in New Orleans. That share is owned by a separate company, Grand Palais Casino Inc.
Hemmeter attorney Basile Uddo said that Tuesday's bankruptcy filings shouldn't affect the financial reorganization of Grand Palais Riverboat Inc., a subsidiary of Hemmeter Enterprises that owned the riverboat.
Daniel Robinowitz, who was Hemmeter's partner in the land and riverboat casino ventures and who is the second largest shareholder in Hemmeter Enterprises, opposed the bankruptcy filing. He said Tuesday's filing by the company's officers is an attempt to dilute the ownership share of stockholders like himself and avoid having to pay the riverboat's creditors.
The riverboat filed for bankruptcy in July, leaving some $30 million in unpaid bills to vendors. Because of the riverboat's financial problems, Hemmeter Enterprises, which owns the riverboat company, is in default on $160 million owed to its bondholders.
If Hemmeter Enterprises and Grand Palais Riverboat Inc. are held to be separate entities, as Hemmeter Enterprises executives and bondholders argue, then the boat's creditors are likely to receive less money than if they are considered one entity, as Robinowitz claims.
Robinowitz has filed a flurry of motions in federal court over the past several months seeking to retain his share of Hemmeter Enterprises. While the riverboat flopped, the Colorado casinos earn annual profits of $12 to $15 million, Robinowitz said.
The bankruptcy filing by Hemmeter Enterprises does not directly affect Christopher Hemmeter because he was ousted from his company by bondholders earlier this year. He remains the chairman of the board.
Given the riverboat's financial problems, the bankruptcy filing by Hemmeter Enterprises was not unexpected. Stephen Szapor, the company's new president and chief executive officer, said he hopes the company will emerge from Chapter 11 in 90 to 120 days. Szapor said most of the bondholders have agreed in principle to the bankruptcy plan and want the reorganized company to emerge from bankruptcy as soon as possible to take advantage of profits from the Colorado casinos, which are in the one-time mining towns of Central City and Blackhawk.
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