Washington, D.C.  20549






Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported):  October 30, 2009



(Exact name of registrant as specified in its charter)







(State or other jurisdiction




(IRS Employer

of incorporation)


File Number)


Identification No.)


3440 West Russell Road, Las Vegas, NV  89118

(Address of principal executive offices)


Registrant’s telephone number, including area code: (702) 889-7695


Not Applicable

(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





ITEM 8.01  Other Events.


As previously disclosed, on March 22, 2009 (the “Petition Date”), Herbst Gaming, Inc. (the “Company”) and certain of its subsidiaries (the “Subsidiary Guarantors”) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”).  On October 30, 2009, the Bankruptcy Court orally confirmed the First Amended Joint Plan of Reorganization (the “Plan”), which provides for the following restructuring (the “Restructuring”) of the Company and the Subsidiary Guarantors (the “Debtors”), to be consummated on the Substantial Confirmation Date (as defined below):


·      Conversion of all allowed claims under the Company’s $860.0 million senior credit facility (the “amended Credit Agreement”) into debt and equity of the Debtors, through ownership of a new holding company (“Reorganized Herbst Gaming”).


·      Termination of all outstanding obligations under the Company’s 8 1/8% senior subordinated notes due 2012 and the Company’s 7% senior subordinated notes due 2014 (collectively, the “subordinated notes”).


·      Cancellation of 100% of the existing equity in the Company.


The Bankruptcy Court is expected to enter written findings of fact and conclusions of law and an order with respect to the confirmation of the Plan in the ordinary course.  The Plan will become effective on the 11th day following the date on which the order confirming the Plan is docketed (the “Effective Date”) provided the additional conditions to effectiveness set forth in the Plan are satisfied or waived.  The Plan generally will be implemented on the third business day following the satisfaction or waiver of all conditions to substantial consummation of the Plan (the “Substantial Consummation Date”), which are described in the paragraph below.  However, the Plan provides that certain payments will be made on the Effective Date, including payment of certain allowed priority claims, certain secured claims and general unsecured claims, in some cases with interest from the Petition Date, as described in the Plan and the Second Amended Disclosure Statement to Accompany the Plan filed with the Bankruptcy Court on July 23, 2009.  Additionally, under the Plan, between the Effective Date and the Substantial Consummation Date, the Company will make adequate protection payments to the lenders under the amended Credit Agreement (the “Lenders”) in the amount of the Debtors’ cash and cash equivalents in excess of $100 million (measured as of the end of every third full calendar month following the Effective Date, and to be paid 30 days thereafter).


The Restructuring will not be completed until the Substantial Consummation Date.  The Substantial Consummation Date will not occur until the Restructuring and the individuals proposed as officers, directors and key employees of the reorganized Debtors have received all requisite governmental and regulatory approvals, and the satisfaction or waiver of the following conditions: (a) none of the Debtors and Lenders are in material breach of the Plan; and (b) the Bankruptcy Court has authorized the assumption and rejection of certain contracts of the Debtors.  The Company currently expects that the Substantial Consummation Date will occur in the fourth quarter of 2010, although the Company cannot assure you that all conditions to the Substantial Consummation Date will be satisfied by that date or at all, or that the Company will be successful in implementing the Restructuring in the form contemplated by the Plan or at all.  The Plan provides that the Substantial Consummation Date must occur no later than one year following the Effective Date, unless extended by mutual agreement of the Debtors and Requisite Lenders (as defined below).  In the event that the Substantial Confirmation Date does not occur by that date, or such later date as may be agreed to by the Debtors and the Requisite Lenders, the confirmation of the Plan would be vacated and all claims (except for allowed priority claims, certain secured claims unrelated to the Lenders or the subordinated notes, and general unsecured claims) would be restored as though the Effective Date had never occurred.


The Debtors and Lenders holding, in the aggregate, approximately 61% of all of the outstanding claims under the amended Credit Agreement are parties to an amended and restated lockup agreement (the “Lockup Agreement”).  Pursuant to the Lockup Agreement, the parties thereto are contractually obligated to use commercially reasonable efforts to successfully consummate the Restructuring and achieve the expeditious consummation of the Plan.  The Lockup Agreement will automatically terminate, pursuant to its terms, if the Substantial Consummation Date does not occur within one year from the Effective Date, unless such termination event is waived by Lenders party to the Lockup Agreement holding at least two-thirds in amount of the total claims held by all Lenders party to the Lockup Agreement (the “Requisite Lenders”) within five days.  In the event that the Substantial Consummation Date does not occur by that date, and the Requisite Lenders do not waive the related termination event and the Lockup Agreement is terminated, the Lenders would no longer be obligated to support the Restructuring.




The Plan provides that, from the Effective Date through the Substantial Confirmation Date, the Debtors will continue to be managed by the existing officers and directors and the Company’s COO/Gaming, who will work, subject to all applicable gaming laws and regulations, in consultation with the Lenders regarding the management of operations, maintenance of working capital and utilization of cash flows of the Debtors.






Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.












Date:  November 3, 2009



/s/ Mary E. Higgins




Mary E. Higgins




Chief Financial Officer