Greektown loans approved
Contractors at Greektown Casino will get paid as soon as this week, averting a massive job walk-off at the construction site and a complete shut-down after months of non-payment.
U.S Bankruptcy Court Judge Walter Shapero was expected to sign an order today that would approve a $51.3 million loan, which includes $44.9 million for payments to the contractors through June.
“We have conquered a great hurdle,” said James Jenkins, president of Jenkins Construction and a partner in Jenkins Skanska, the general contractor for Greektown Casino’s expansion. “Now we can move forward.”
The state’s Gaming Control board will meet Thursday to approve the financing package. The board must approve the plan according to state law and asked the judge to make the order to approve financing conditional to its approval.
Shapero initially told Greektown attorneys that he would write the order next week, allowing all interested parties to review the terms of the loan, which set off a panic through the courtroom.
Contractors have been promised for months that they would be paid and were told last week that the casino was entering bankruptcy in order to obtain a loan from Merrill Lynch, which made the bankruptcy filing a condition of the loan.
“The contractors will walk off the job today,” said Dykema Gossett attorney Ronald Rose, who represents Jenkins Skanska. “The purpose of the bankruptcy was so that they could get paid. They are still taking a risk by working today. What this order does is tell workers that they will be paid for their work today.”
The loan Shapero approved today includes a $6.4 million loan that will go towards fees and interest. The remainder will go towards paying builders.
“This is good news for us,” Greektown spokesman Roger Martin said.
Shapero made it a condition of the loan that workers continue to work on the expansion.
The project’s general contractor and about 90 subcontractors had threatened to stop work. Some subcontractors and workers had already walked off the job citing nonpayment.
On Tuesday, a third of workers had not shown up to work.
The $44.9 million is part of $150 million in loans that Greektown says it needs to finish the casino’s expansion. A hearing will be held at a later date to approve the remainder of the financing package.
Greektown, which trails Detroit’s two other casinos in revenue, filed for bankruptcy last Thursday.
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Tags: Loans