Culinary Union Announces Opinion on Pioneer Finance Corp. and Santa Fe Gaming Corp.LAS VEGAS--(BUSINESS WIRE)--Oct. 28, 1998--The Las Vegas-based Culinary Union announced the establishment of its Web site, www.santafailure.com, to address the "exchange offer" and "consent solicitation Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with " announced by Pioneer Finance Corp. and its parent company, Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. Gaming Corp. (AMEX AMEX See: American Stock Exchange :SGM SGM abbr. sergeant major ). Under a section for Pioneer Noteholders in the Web site, the Union urges Noteholders to reject the "exchange offer" and "consent solicitation" for reasons summarized here: -- Santa Fe Gaming has valuable assets that, while highly leveraged, could be sold, potentially creating excess value to partially satisfy Pioneer Noteholders. Noteholders currently have the right to invoke Santa Fe Gaming's guarantee of the Notes in the event of nonpayment on Dec. 1, 1998. -- For example, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. loan documents, Santa Fe Gaming agreed to obtain an appraisal for the Wet `n Wild property at not less than $52.4 million and one for the Henderson property at not less than $18.4 million. The two properties are collateral for a $57.5 million loan, suggesting there may be excess value in these properties. Under the "consent" or "exchange offer" scenarios, Santa Fe Gaming may have little incentive to allocate excess value in these or other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. to benefit Pioneer Noteholders. -- Moreover, those assets may be disposed of or restructured during the period called for in the consent solicitation when Noteholders would "forbear for·bear 1 v. for·bore , for·borne , for·bear·ing, for·bears v.tr. 1. To refrain from; resist: forbear replying. See Synonyms at refrain1. until December 2000 against exercising rights and remedies" for nonpayment, because the $57.5 million loan secured by them matures in December 1999. Noteholders could tie their hands if they agree to the consent solicitation. -- We question whether the value of the Pioneer assets will decline further by 2000 or 2006. Courtney Alexander, Culinary Union research director, stated: "The company's exchange offer and consent solicitation attempt to box Pioneer Noteholders into a lose-lose situation, when in fact, the rights and remedies available to Noteholders give them the opportunity to restructure Santa Fe Gaming for their own benefit, instead of the controlling stockholder's. "I believe there may be value in this company which is locked up by its complicated financial and debt structure and the Lowden Family's management," Alexander added. The Web site also includes a copy of the Culinary Union's recent report, subtitled "Entrenched en·trench also in·trench v. en·trenched, en·trench·ing, en·trench·es v.tr. 1. To provide with a trench, especially for the purpose of fortifying or defending. 2. Management and a Litany of Failures," which analyzes the financial condition and capital structure of Santa Fe Gaming. For a printed copy of the Union's report or for more information, contact Courtney Alexander at 702/387-7082, or visit the Union's Web site at www.santafailure.com. |
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