Hotel Online Special Report
Las Vegas Culinary Union Expresses Opinion 
on Pioneer Finance Corp. and Santa Fe Gaming Corp.
LAS VEGAS - Oct. 28, 1998--The Las Vegas-based Culinary Union announced the establishment of its Web site,, to address the "exchange offer" and "consent solicitation" announced by Pioneer Finance Corp. and its parent company, Santa Fe Gaming Corp. (AMEX:SGM). 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 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 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 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. 

Culinary Union, Las Vegas
Courtney Alexander, 702/387-7082
Also See:
Castles Made of Sand: A Critique of Las Vegas Sandsí Planned Mega-Resort /Culinary Union / Oct 1997 
Union Demonstrators Arrested at Santa Fe Hotel Casino / Sept 1998 

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