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Gaming company to purchase near-total control of Michigan casino

An out-of-state acquisitions company controlled by a larger gaming company has reportedly made plans to buy enough shares in Detroit's Greektown Casino-Hotel to establish complete control of the business. The deal will see the company purchasing 29.8 percent of the casino's equity interest from two other firms. This will give the company a total of 97.2 percent of the casino's shares, which will in turn force the rest of the shareholders, who own the 2.2 percent of the hotel and casino, to sell their shares as stipulated in a short-term merger provision signed between the company and Greektown's executive board.

The company obtained a controlling stake of the Michigan casino in April, when it bought shares from three other institutional shareholders. That agreement earned the company ownership over about 67.4 percent of the casino's shares. Once the new purchase is approved by the Michigan Gaming Control Board, the company will have paid for the shares of all of the original bond holders who took control of Greektown Casino-Hotel after its 2010 recovery from bankruptcy.

Representatives with the company said they have not established a schedule for any prospective changes to the casino's operations or policies, but said it will perform an extended assessment of those factors. The company did announce it is trying to replace Greektown's current 13 percent financing rate with a lower rate. This could be due to the Michigan Gaming Control Board's concerns with the casino's capital structure, as explained by a company board member and former risk and quality expert with Pricewaterhouse Coopers.

Greektown Casino-Hotel recently filed documents with the U.S. Securities and Exchange Commission that hinted at possible changes to come. In that filing, the casino announced that the current chief operating officer and president of the purchasing company will take on the respective roles vice chairman and chairman upon the finalization of the deal. In such dealings, it is a good idea to let business attorneys provide creative and cost-effective representation to protect the interests of all parties.

Source: Crain's Detroit Business, "Gilbert and Rock Gaming make deals to purchase 97.2% of Greektown casino shares" Sherri Welch, May. 22, 2013

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