Barden defaults on loan, seeks change in casino ownership
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International lender Credit Suisse has notified North Shore casino developer Don Barden he is in default of a $200 million bridge loan for the project according to a petition filed with the state Gaming Control Board.
The board today is considering a request by Mr. Barden to approve a new financing plan for the casino that includes a change in the company holding the license for the project. Mr. Barden would no longer be the majority owner of the casino, according to his spokesman.
Under the revised plan, Mr. Barden would retain about 25 percent interest in the casino. Walton Street Capital Fund 6, which is investing $120 million to complete financing for the project, will be the majority owner.
Chicago billionaire Neil Bluhm said he is one of five founders of Walton but his stake in the casino would be less than 1 percent.
The proposed investment would be used to pay off the bridge loan and to help complete construction.
If Credit Suisse enforces the default, it could result in construction disruption and significant delays in finishing and opening the casino. Work was halted at the site last month after contractors said Mr. Barden hadn't paid for work since April.
Under the proposed restructuring, Mr. Barden would remain a principal licensee and indirect owner of the new company, Holdings Acquisition.
In the petition, Mr. Barden also has backed off a proposal to delay construction on an outdoor amphitheater, boat docks and walking trails for three years. He now says it will be done at the same time the casino is open.
More details in tomorrow's Pittsburgh Post-Gazette.
First Published July 10, 2008 1:07 pm