Premier Entertainment asks court to allow insurance proceeds to be used as collateral

By Jennifer Lanning Drey

Eugene, Ore., Sept. 21 - Premier Entertainment Biloxi LLC has asked for court permission to use its Hurricane Katrina-related insurance proceeds as cash collateral in the company's Chapter 11 case, according to a source closely related to the case.

If the use of the collateral is approved, "it could be a first step or it could be a final step," toward accessing the money, the source said.

Premier believes its noteholders will be deemed adequately protected under Chapter 11 because the cash collateral is worth more than what is owned to them, the source said.

A hearing has been scheduled for Oct. 3 at the U.S. Bankruptcy Court for the Southern District of Mississippi

As previously reported, Premier's pre-bankruptcy secured bondholders have denied the company access to the insurance proceeds, according to an 8-K filing with the Securities and Exchange Commission.

Premier, which does business as Hard Rock Hotel & Casino Biloxi, filed for Chapter 11 bankruptcy Tuesday in the to get the court's help accessing the insurance funds, according to the 8-K filing.

Premier is a Biloxi, Miss., resort operator. Its Chapter 11 case number is 06-50975.

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