It’s tough going for the Monarch Casino Resort and Spa in Black Hawk, Colorado. It is slated to become a massive integrated resort, but construction progress has been stymied by a lawsuit.
The boiling point
Bad blood is brewing to the boiling point with the project’s subcontractors. Word is out and Monarch’s stock on NASDAQ has plummeted 5%, a clear downward trend.
The property owners is accusing the subcontractors’ group, PLC, of poor renovation management.
According to sources, PLC’s legal action is…
“…an attempt to deflect attention from their failures to deliver the completed project in a timely and cost appropriate manner.”
The lawsuit is likely to cause a detrimental slowdown but the projected opening in early 2020 remains intact. The site will house an expanded casino, restaurants and various public areas. As expected, Monarch is eager to resolve all outstanding issues.
Lawsuit causes worry
No one is happy about the construction delays and the falling stock. Investors are concerned.
They know that Monarch has a $250-million credit facility that must be appropriately managed, but that can’t be done without a timely completion of the upgrades.
Details of the lawsuit include: the total revolving loan commitment under the Amended Credit Facility will be automatically and permanently reduced to $50.0 million on the earlier of the last business day of the first full quarter after completion of the expansion project at the Monarch Casino Black Hawk, or on December 31, 2019, and all then-outstanding revolving loans up to $200.0 million under the Amended Credit Facility will be converted to a term loan at such time.