Las Vegas, NV- A fixture on the Las Vegas strip, Jerry’s Nugget, has filed for Chapter 11 bankruptcy after talks with creditors failed.
US Bank one of the casino’s main creditors filed a suit in March after they defaulted on a loan which is valued at $3.6 million. When the suit was filed, Jerry Stamis, CEO for Jerry’s Nugget said they had reached a deal and the lawsuit would be dismissed. But talks failed after several months, according to the Las Vegas Review-Journal.
Chapter 11 debt-reorganization allows a business to continue operations while they work to restructure their debts. Creditors are also allowed to submit their own plan for reorganization, but the bankruptcy judge makes the final decision on which plan will be implemented.
In a prepared statement, Stamis said, “Our best efforts at structuring a deal outside of court have failed. It is now in the best interest of the company, our employees, and our customers to utilize the bankruptcy process to reach more traditional refinancing terms, while maintaining the company’s normal operations.”
The bankruptcy court filing lists the casino’s assets and liabilities at $10 million.
Another casino, Spartan Gaming also filed for bankruptcy on Monday, leaving many in the city to wonder if they are entering a new rash of casino bankruptcies.
Troubled businesses often need the assistance of a bankruptcy lawyer when all their efforts to return to solvency fail. Under a court approved plan, the financially strapped company can pay off their creditors and emerge from bankruptcy in a timely fashion.