The planned buyer of Casino Miami Jai-Alai will have a chance to purchase the facility in a bankruptcy auction, as the owner negotiates the terms of a deal that would let the buyer have first dibs on the property.
At a hearing in federal bankruptcy court in Miami on Wednesday, lawyers for the parent company of the casino and jai-alai fronton announced a deal with creditors to pursue an auction in about six months, said Luis Salazar, one of the casino’s lawyers. The parent company, Florida Gaming Corp., filed for bankruptcy protection in August in an effort to stall a planned $115 million sale to Silver Entertainment Gaming and Hospitality because the terms of the sale essentially bumped up the property’s debt by millions of dollars.
Silver accused Florida Gaming of using bankruptcy court to undo a deal that should remain in effect.
Judge Robert Mark said in earlier hearings that a bankruptcy auction with Silver as the lead bidder was a possibility. Under that scenario, Silver would assume the role of a “stalking horse” bidder, in which it would be paid a penalty fee if another buyer beat its designated bid. Salazar said Florida Gaming and Silver Entertainment are negotiating the terms of a stalking-horse auction.
The auction would essentially complete a deal that was signed in late 2012 when Silver, which owns casinos in Panama and Curacao, agreed to buy Casino Miami Jai-Alai. The facility, once a center of Miami nightlife, loses money hosting jai-alai matches but generates about $1 million a week from a casino operation it added in early 2012.
Despite filing for bankruptcy protection, the casino’s lawyers emphasized the entire facility is profitable and was only in Chapter 11 due to the dispute over the sale. A provision in the casino’s loan agreement with ABC Funding requires Florida Gaming to pay back more than its original $87 million construction loan if it sells the casino for a price below an appraisal. After signing the deal to sell for $115 million, an appraisal later valued the operation at $180 million. Penalties tied to the higher valuation and other provisions topped $20 million, lawyers said.