What standing do chips have in bankrupcy?

[GeorgeF]

If a casino goes bankrupt how are monies owed to chip holders handled relative to bond holders, employees, ect.. I am sure it varies from state to state.

The Binions closing makes me wonder what would happen if Trump went bust, as has happened in the past. Perhaps Trump's silly reality program is really an attempt to raise money?

[Ray Zee]

genrally when anything goes bankrupt it means they have little left. few creditors get anything unless they reorginize. bankrupcy eliminates the creditors. irs comes first then usually bondholders. chip holdrs would be creditors that would have to petition the banrupcy court. and wouldnt likely get anything at all. one of the lawyers here could correct me and add more. but if you have chips or cash on deposite anywhere you have any doubts dont leave it there if you like money.

[andyfox]

"generally when anything goes bankrupt it means they have little left. few creditors get anything unless they reorginize"

You're correct in that the creditors generally get screwed. The only time they might come out OK is if they have something the reoganizing company still wants or needs. In today's world, it's not as general a case as it once was that the company declaring bankruptcy has little or nothing left. Some big companies have gone chapter 11 with more assets than liabilities. Several major retailers, for example, declared bankruptcy in order to get out of unprofitable leases, allowing them to close loser stores and retain their better locations.

I don't know the details of the Binion's bankruptcy, but I would imagine chips would be close to worthless, as you suggest. In today's world, if someone doesn't want to pay you what they owe you, there's a much better chance than ever before that you're not getting your money. Sad but true.

[Chris Alger]

In the absence of some agreement to the contrary (like an expiration date), you should have an unsecured claim for the full amount of the chips. If unsecured claims are paid under a liquidation or reorganization, you should receive a distribution equal to your pro-rata share of money available to unsecured creditors. In the event of a Chapter 7 (liquidation) filing, you should recieve a one-page proof of claim for in the mail. Fill it out and mail it in.

If Binion's files for Chapter 11 (reorganization), however, they might be able to stay in business while the reorganization proceeds. This would be an opportunity for you to cash in the chips.

From what I've read, the biggest difficulty in collecting what you're owed is that your claim is unsecured (uncollateralized). Secured claims, including government tax claims secured by property liens, get paid first. In fact, as I recall government tax claims take priority over nearly everything.

[Ragnar]

The other posts summarize the bankruptcy situation pretty well as I remember it from law school (I was a different kind of lawyer).

As a practical suggestion to get your money back--wait to see if it reopens--it may--then go there and cash them all or play them if they honor them. If they don't you might try selling them on E-bay as souvenirs. They'd probably have more value there than as an unsecured asset in bankruptcy.

Ragnar

[elwoodblues]

Yet another liberal lie by Alger...oh sorry, I thought this was a different thread and I was a different poster /images/graemlins/grin.gif

[adios]

I would think in a chapter 11 reorganization one could cash them in since the casino would presumably open. In a liquidation I don't think you'd get much for them.

About Trump, don't know but doubt that he's using the show to raise capital. I haven't looked at the Trump financial statements in years but I would suspect he's leveraged to the max.