Maloofs Improve Financial Outlook By Surrendering Controlling Interest In Palms
NBA Kings Owner the Maloofs “have surrendered controlling interest" in The Palms Las Vegas, claiming that the deal “improves their finances considerably,” according to a front-page piece by Dale Kasler of the SACRAMENTO BEE. The Maloofs yesterday announced that they “reached a ‘recapitalization’ agreement with the Palms Casino’s main creditors,” investment firms TPG Capital and Leonard Green & Partners. George Maloof said that the deal “erases the Palms’ debt” but leaves the family with “less than 50 percent of the equity.” Maloof said that he “will continue to run” the casino. Kasler notes the Maloofs’ deal “could have significant implications for the Kings at a crucial time in the team’s history.” Sacramento officials and the NBA “expect the Maloofs to contribute” to a new arena for the Kings, though the exact amount “remains to be seen.” Although the Kings and The Palms are separate businesses, it has “been clear that the hotel’s problems have affected the family’s overall finances.” Maloof contends that the family's finances "have improved" with The Palms deal complete. He said, “We’re definitely in a better position" (SACRAMENTO BEE, 6/15). Maloof also noted that pursuant to terms of the agreement, which is “still subject to regulatory approvals,” the family’s stake in The Palms “will fall to between 10% and 20% from 85%” (WALL STREET JOURNAL, 6/15).