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Court halts call on Landry’s notes

HOUSTON Landry’s Restaurants Inc. said late Thursday that a judge has ordered a creditor to halt its call for the early repayment by the restaurant and casino company of $400 million in 7.5 percent senior unsecured notes. The restraining order could avert the need, at least temporarily, for Landry’s to seek a refinancing of its debt, which it said was a necessity last week.

Afederal judge for the U. S. District Court for the Southern District of Texas, Galveston Division, also ruled that all note holders are temporarily prohibited from taking any action on the basis that the notes had been accelerated or from communicating to anyone that the notes have been accelerated and that Landry’s is not paying its debts. A temporary injunction hearing is scheduled for Aug. 16.

Last week, Landry’s reported that the notes had been called by the trustee, U.S. Bank, and by a majority of its holders because the casual-dining and gaming company was late in filing its financial statements for the year ended December 2006.

The delay in filing was caused by an internal, voluntary review of stock option-granting practices that was just completed on Monday and found no intentional misconduct among senior officers, but will lead to a charge of more than $8.6 million. Landry’s said it was confident it could refinance its debt, but that a new credit agreement could carry less favorable terms because of recent uncertainty in the credit markets.

Houston-based Landry’s operates more than 200 restaurants and various gaming, hotel and retail concepts. 

TAGS: Finance News
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