Some of our San Diego readers may be familiar with the Santa Ysabel Resort and Casino. The 37,000-square-foot casino and resort is a popular destination for those seeking poker tournaments, slots and blackjack. However, it appears this business has fallen on some hard luck itself, as the casino recently filed for Chapter 11 bankruptcy protection.
As the casino begins the Chapter 11 process, it has received permission to continue to pay its employees and remain in operation. Any of our California readers who are familiar with Chapter 11 bankruptcy probably know that the purpose of the filing is usually to submit a plan for reorganizing the business structure of the company, as well as consolidating a plan to pay creditors back over time -- all while remaining in operation in efforts to turn around a profit. The ultimate goal is for the company to emerge from the process with a more streamlined, profitable model on which to move forward.
The current plan to stay in operation is good news for the employees of Santa Ysabel Resort and Casino, which is one of the larger employers in the San Diego area.
According to reports, the casino's largest creditor is the Yavapai Apache Nation, which provided an initial $9 million loan when the casino and resort were getting started in 2007. JP Morgan Chase provided approximately $26 million in funds at that time as well, and the Yavapai Apache Nation has since assumed that debt.
Even though this resort and casino has experienced financial problems almost since the doors opened, the company representatives apparently hope that the bankruptcy process will proceed smoothly and the business will eventually emerge.
Source: The Wall Street Journal, "California Tribe's Casino Files for Bankruptcy," Katy Stech, July 5, 2012