Slot machine operator Lucky Bucks is facing an early challenge to its chapter 11 case from junior bondholders after the closely held business proposed a restructuring that recoups a small fraction of more than $440 million in debt-funded dividends paid to shareholders in recent years, the Wall Street Journal reported. Unsecured bondholders including Marathon Asset Management, Monarch Alternative Capital and BC Partners objected on Monday to the company’s chapter 11 strategy that would mostly wipe out $300 million in debt they bought in 2021 and 2022. Lucky Bucks, among the largest operators of coin-operated amusement machines in Georgia, filed for chapter 11 on Friday blaming slowing consumer spending and greater enforcement of Georgia gaming regulations that took some of its machines at gas stations and convenience stores in the state offline. In bankruptcy, the business has proposed handing 100% ownership to senior lenders, while driving down its roughly $900 million debt load closer to $100 million. Lucky Bucks’ decline came after it loaded up on debt in 2021 and 2022 to fund shareholder distributions, including its majority owner, Dallas private-equity firm Trive Capital.
