SUBMITTED RELEASE FROM FRIENDS FOR HARRY REID
“She is not just window dressing. She is active. She’s on the board, and she’s hands on.”–State Senate Majority Leader Bill Raggio, of Sue Lowden’s tenure at Santa Fe Gaming Corporation (now called Archon Corporation)
“As a Nevada businesswoman, she’s created jobs by managing complex budgets.”–Sue Lowden For U.S. Senate web video, 10/12/2010
Sue Lowden loves to tout her business record as the chief reason she’s qualified to represent Nevada during these difficult economic times, stating just last week that “what separates me is I am a businesswoman.” However, if her track record as a casino executive is any reflection of her approach to our state’s economy, Nevada families would be in serious trouble.
As vice president of Santa Fe Gaming Corporation (SFGC), Lowden ran the company into the ground.
Under her leadership, SFGC had only one year in the 1990s when the company didn’t end up in the red. In fact, the only profitable year in the entire decade came in 1996, when Lowden sold off her flagship property, the Sahara Casino and Hotel.
That was only the beginning of Lowden’s fiscal incompetence. SFGC was forced into bankruptcy only a few years later when it failed to meet its financial obligations, a junk bond payment worth $60 million that carried a 13.5% interest rate. In order to make payments under the court-ordered restructuring, Lowden’s company ended up jettisoning the Santa Fe Casino.
After a decade of Sue Lowden’s business “expertise,” the Santa Fe Gaming Corporation was de-listed from the stock exchange in 1999 because it no longer met the guidelines to be listed.
“Sue Lowden took a major southern Nevada gaming company and drove it into the ditch in less than a decade,” said Friends for Harry Reid Communications Director Kelly Steele. “Nevada needs the kind of leadership and experience that will help rebuild the economy and put people back to work, and based on Sue Lowden’s record she’s exactly the wrong person for the job.”
Reid has extensive experience in the private sector, practicing law for 18 years and running his own law firm.
Background
Santa Fe Gaming Corporation failed miserably in the 1990s
Lowden’s company had only one profitable year in the ’90s. According to Santa Fe Gaming Corporation’s annual SEC filings, fiscal year 1996 was the only year the company did not post losses. The company reported losses from 1990-1995 and 1997-1999. This includes the results of Santa Fe’s predecessor corporation, Sahara Resorts. [Section 6 “Selected Financial Data” >From SEC Annual reports filed by Santa Fe Gaming Corp.]
Santa Fe Gaming Corporation posted gains only after selling the Sahara
Santa Fe showed profits only after selling off the Sahara Hotel and Casino. According to Santa Fe Gaming Corporation’s annual SEC filings, fiscal year 1996 was the only year the company did not post losses. However, the footnotes to the selected financial data give more insight into the gains in 1996, stating “Fiscal 1996 includes a $40.8 million gain relating to the sale of the Sahara.” [Section 6 “Selected Financial Data” From SEC Annual reports filed by Santa Fe Gaming Corp.]
Santa Fe Gaming Corp. was forced into bankruptcy
Santa Fe Gaming Corporation was forced into bankruptcy. Santa Fe Gaming Corporation (SFGC) was the parent company of Pioneer Financial Corp, which was a shell corporation that issued bonds to finance the purchase of the Pioneer Hotel and Gambling Hall in Laughlin, NV. After SFGC’s Pioneer subsidiary went into default on payments to bondholders, a group of bondholders filed a petition for involuntary Chapter 7 Bankruptcy against Santa Fe Gaming Corporation. The Chapter 7 proceedings against SFGC were suspended in order for a Chapter 11 proceeding to move forward against the Pioneer subsidiaries. [Santa Fe Gaming Corp. Case #99-10315 US Bankruptcy Court, District of Nevada]
Pioneer Hotel Inc filed for bankruptcy after failing to make payment on junk bonds. Pioneer Hotel Inc, and Pioneer Finance Corp entered a voluntary filing in Nevada bankruptcy court listing assets of less than $42 million and debts of over $55 million. The Las Vegas Review Journal reported that the company “was forced to file for bankruptcy when it failed to make a December 1998 balloon payment of $ 60 million on junk bonds carrying a 13.5 percent interest rate.” [Pioneer Hotel Inc Bankruptcy Petition #99-12854 US Bankruptcy Court, District of Nevada; Las Vegas Review Journal, 5/9/2000]
Santa Fe Casino was liquidated to pay off bondholders in bankruptcy case
Pioneer’s bankruptcy reorganization relied heavily on sale of Santa Fe Casino. According to the annual SEC report of Pioneer’s parent company Santa Fe Gaming Corporation, the bankruptcy court approved a plan which required Pioneer to pay off the bonds by August 31, 2000. The annual report stated:“In August 2000, PHI borrowed $36.0 million under the terms of the credit agreement entered into in connection with the agreement for the SFHI [Santa Fe Hotel] Asset Sale and used the proceeds of the borrowing, together with $5.0 million in additional borrowings under a financing facility at SLVC [Sahara Las Vegas Corp] and $2.0 million of existing working capital, as well as the retirement of $17.6 million principal amount of 13 1/2% Notes owned by SLVC, to retire all outstanding 13 1/2% Notes.” [Santa Fe Gaming Corporation SEC Form 10K, 12/28/2000]
Deal to sell Santa Fe included $36 million loan to save Pioneer from bankruptcy. In a June 2000 article reporting on the sale of the Santa Fe Hotel and Casino, the Associated Press reported: “The deal will also help stabilize struggling Santa Fe Gaming Corp. Part of the purchase price – up to $36 million, Santa Fe Gaming said – will come in the form of a loan to bankrupt Santa Fe Gaming subsidiary Pioneer Hotel Inc., the owner of the Pioneer hotel-casino in Laughlin. The subsidiary had $44.4 million in notes that have been in default since December 1998.” [Associated Press, 6/13/2000]
Santa Fe Gaming Corporation was de-listed
Santa Fe Gaming Corp was de-listed from stock exchange. Santa Fe Gaming Corporation issued a press release on March 22, 1999, announcing that the company was being de-listed from trading on the American Stock Exchange. “Santa Fe Gaming Corporation (“SFGC”) (AMEX:SGM), a diversified gaming company headquartered in Las Vegas, announced today it is consenting to the removal of its Common and Preferred Stocks from the American Stock Exchange (AMEX). This action became necessary because the Company no longer fully satisfies all of the guidelines of the AMEX for continued listing.” This press release was included as exhibit 99.1 to an SEC Form 8-K (current report) filed the same day. [Santa Fe Gaming Corporation Press Release, 3/22/1999]
