A Stern Glance

Company to File Voluntary Chapter 11 – All Operations to Continue and Vendors to Be Paid in Full on Normal Terms

Black Gaming, LLC today announced that it has entered into a lockup agreement with the holders of approximately 70% of the Company’s $125,000,000 Senior Secured Notes to restructure Black Gaming’s indebtedness, provide for an investment of new capital into the Company and enhance Black Gaming’s executive management team (as reorganized, Black Gaming will be referred to herein as “Reorganized Black Gaming”). Under the proposed restructuring plan (the “Plan”), all operations of the Company will continue under current management on a “business as usual” basis throughout the restructuring process, including payments to vendors under normal trade terms without interruption.

In a statement, Black Gaming’s majority owner, Robert R. “Randy” Black, Sr., noted, “Our Company is generating positive EBITDA, despite the challenging economy. Our problem is one of leverage; we have more debt than our operations can support. Our agreement with our lenders is designed to resolve this by restructuring our debt to a level our operations can sustain and to provide additional capital.

“Given the size and complexity of the Company and its debt structure, the Company and its financial advisors have determined that the most effective means to implement the plan will be through pre-negotiated Chapter 11 filings by the Company and its subsidiaries, which are expected to take place shortly. The Company expects that the Chapter 11 cases will move through the bankruptcy court system expeditiously.

“To ensure that all of our operations continue to operate normally throughout this process, the proposed restructuring anticipates that all vendors would be paid on the same current terms on which they presently are being paid for all goods and services provided to Black Gaming, including goods and services provided immediately prior to the contemplated Chapter 11 filing.”

Under the Plan when and if consummated:

• The Company’s Senior Credit Facility with Wells Fargo Foothill, Inc. will be paid in full.
• The Company’s Senior Secured Noteholders will exchange their notes and claims thereunder for a new credit facility of $62,500,000 and, at their option, either a cash payment or an equity interest not to exceed 6% in Reorganized Black Gaming.
• The Company’s Senior Subordinated Noteholders will receive warrants to purchase equity interests in Reorganized Black Gaming in exchange for their notes and claims.
• To the extent permitted under the Bankruptcy Code, General Unsecured Claims, including vendors, will be paid in cash.
• Anthony Toti, Newport Global Advisors or one of its affiliates, Randy Black, Sr. and one or more parties to be designated by Michael Gaughan will contribute cash in excess of $17,000,000 in exchange for a minimum of 94% of the new equity interests in Reorganized Black Gaming.
• Randy Black, Sr. will remain Chief Executive Officer; Anthony Toti will remain Chief Operating Officer; and Sean McKay will remain Chief Financial Officer.

Black continued: “We are extremely pleased that we could come to an agreement with our lenders. In this difficult economy, gaming has been hit hard, and our Company was no exception. We are one of the few gaming companies that has been able to reach a mutual compromise with our lenders, and it is my belief that we reached this agreement due to the strength and positioning of our properties and the experience of our management team and its employees.

“We believe this agreement will pave the way for our Company to emerge stronger, with less debt and with a team of management and employees ready to guide our hotel-casino resorts into the future. We have worked out high level plans to improve our operations and have enlisted some tremendous support.

“We want to salute and thank our loyal customers, our fabulous employees and all of those who have stuck by us and continued to support us. We know that we still have a lot of work to do, but we are confident that this Plan will provide the path to get there.”

Approval of the Plan and all principal steps related thereto, will be subject to numerous preconditions, including, but not limited to, preparation of definitive documentation, the commencement of a voluntary filing with the United States Bankruptcy Court for the District of Nevada, the approval of a plan of reorganization by creditors and the Bankruptcy Court, and certain approvals, granting of licenses and findings of suitability by the Nevada Gaming Commission and the City of Mesquite.

This Press Release is intended only as a summary of the agreement and is qualified in its entirety by the written agreement. The agreement may be viewed at www.gordonsilver.com under the “Public Filings” tab.

About Black Gaming

Black Gaming, LLC, headquartered in Las Vegas, Nev., is a holding company and is an owner and operator of three gaming entertainment properties located in Mesquite, Nev.

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