Signs of Weakness Emerging in Vegas Gaming Scene, Says Houlihan Lokey’s Jay Weinberger

By Gaurav Sharma

Regional casinos may have held up despite a pullback in consumer spending, but signs of weakness in Las Vegas are increasingly visible, according to Jay Weinberger, managing director in Houlihan Lokey’s financial restructuring group.

“While we’re seeing weakness in Vegas, regional casinos have held up so far. Consumers are spending, but their habits have changed. They will still spend locally at casinos … but they are forgoing their trips to Vegas,” said Weinberger, who has advised numerous companies and creditor groups in both in-court and out-of-court restructurings.

Although regional markets have remained resilient, Weinberger cautioned that the trend may not hold indefinitely.

“If the consumer continues to get weaker, one would think the regionals would weaken as well,” he said. “We see the next wave of restructurings in the gaming space being quite different from what was observed during the financial crises given a significant number of gaming companies no longer own their real estate.”

“In the last several years, restructuring solutions have shifted from in-court bankruptcies to out-of-court LMEs,” he continued. “It has yet to be seen how LME solutions would apply to gaming operators who do not own their real estate.”

Weinberger opined that the impact of a pullback in spending from lower-end consumers is increasingly evident in sectors such as retail, restaurants and gaming, but it has yet to be seen if this would cause major financial stress in these sectors.

“We’re seeing the lower-end consumer struggle, and the trends that we’re seeing would suggest we expect it to continue,” Weinberger said.

Restaurants have seen foot traffic fall, but that may not translate into widespread stress in the sector, Weinberger said.

“During periods of consumer weakness, spending often shifts down rather than disappearing altogether. In the current environment, fast casual chains and value-oriented casual dining brands (e.g., Applebee’s) have outperformed traditional fast food because they offer a stronger value proposition.”
 

First Day Year In Review: Surge in Freefalls, Billion-Dollar DIPs

In 2025, chapter 11 bankruptcy filings reached record levels, with 555 cases surpassing the $10 million liability threshold, marking a 20% increase from the previous year. The real estate sector was particularly affected, accounting for 35% of these filings, while consumer discretionary, industrials and healthcare sectors also saw significant activity.

The year also set the record for the number of DIP financing facilities with aggregate commitments above $1 billion. The Southern District of Texas hosted the largest cases, while for the first time the Northern District of Texas surpassed the Southern District of New York for billion-dollar filings. Economic challenges such as declining consumer demand, inflation and post-pandemic effects were major contributors to the distress, alongside new trends in DIP financing and regulatory uncertainties. Octus’ 2025 First Day Year in Review can be found HERE.

Liability Management Quarterly: Optimum Drop-Down, Wesco Decision and More

In our fourth-quarter 2025 global quarterly report highlighting our work on liability management exercises, we discuss Optimum Communications’ deal-away drop-down, what impact the latest decision in the Wesco saga may have, Altice International’s drop-down, Lowell’s recent securitization and Hilong’s proposed second restructuring. This report also includes a listing of “aggressive” transactions completed by U.S.-based borrowers. Octus’ coverage of Liability Management can be found HERE.

Americas Court Opinion Review: STG Takes LME Two-Step to Jersey

In the latest installment of the Court Opinion Review, we discuss STG filing chapter 11 to cleanse its LME, a committee professional fee enhancement request in Yellow Corp. and a questionable sale process in Genesis Healthcare. Read the Court Opinion Review HERE.
 

QVC Group 

Advisors to bondholders of QVC Inc. and Liberty Interactive LLC have signed nondisclosure agreements with the company to engage in balance-sheet negotiations as the company finds it increasingly difficult to service its debt, according to sources. QVC is working with Kirkland & Ellis as legal advisor and Evercore, while a group of Liberty Interactive LLC bondholders is seeking advice from Akin Gump and Centerview Partners. Octus’ coverage of QVC Group can be found HERE.

Saks Global Enterprises 

Saks’ persistent delayed vendor payments damaged trust among vendors and intensified inventory flow issues in the fall of 2025, leading not only to continued sales declines but also a materially lower borrowing base on its ABL facility, which, combined with a step-up in minimum availability requirements, further constrained its liquidity. Its contemplated DIP financing includes $1 billion of new-money DIP term loans, which creditors will lend to special purpose vehicle SGUS to then be lent to OpCo debtor Saks Global Enterprises via an intercompany loan. This DIP also includes up to $1.56 billion of rollup loans, while the OpCo DIP includes up to $752 million of rollup loans. Octus’ coverage of Saks Global Enterprises can be found HERE.

BRC Group Holdings 

BRC Group Holdings, fka B. Riley Financial Inc., recently filed third-quarter 2025 financial statements highlight the company’s strategic shift toward financial services and capital markets following several divestitures. The company’s capital markets segment showed signs of recovery, with significant sequential revenue growth, even as it continues to face legal risks related to its previous investment in Franchise Group and its association with Brian Kahn. Octus’ coverage of BRC Group Holdings can be found HERE.

Entertainment Partners

Some lenders to Entertainment Partners have consulted with a legal advisor as the payroll services provider for the entertainment industry continues to suffer from lower volumes from 2023 Hollywood strikes and faces a nearing 2026 maturity, according to sources. Octus’ Entertainment Partners coverage is HERE.

Vibrantz Technologies

An ad hoc group of creditors to Vibrantz Technologies is being advised by an investment banker, according to sources. The group, also represented by Gibson Dunn as counsel, has amassed more than a majority of the original term loan, all of the incremental loan and more than 70% of the 9% secured bonds. Octus’ Vibrantz Technologies coverage is HERE.

Eyecare Partners

Lenders to privately held EyeCare Partners are consulting with a legal advisor to evaluate next steps following earnings deterioration, according to sources. Investors are deliberating the possibility of a restructuring, the sources said. Octus’ EyeCare Partners coverage is HERE.

QVC Group

Qurate Retail Group is working with a financial advisor, according to sources. Octus reported on Jan. 20 that the publicly listed home television shopping network and video commerce retailer is exploring options for its capital structure, including a potential chapter 11 bankruptcy, to restructure its debt. Octus’ QVC Group coverage is HERE.

Parts Authority

Parts Authority is working with a legal and financial advisor to evaluate options for its balance sheet, including a liability management exercise, according to sources. The Kohlberg & Co.-backed distributor of aftermarket and original equipment manufacturer automotive and truck parts is facing industry headwinds because of a pullback in consumer demand amid high inflation, the sources said. Octus’ Parts Authority coverage is HERE.

SonicWall

SonicWall and its lenders are working with advisors to address ongoing concerns over the cybersecurity company’s performance and liquidity profile as the price of its term loan descends to fresh lows in secondary trading, according to sources. Octus’ SonicWall coverage is HERE.

Nine Energy Services

An ad hoc group of Nine Energy Service creditors is working with a legal advisor as the company contemplates chapter 11 bankruptcy amid cash burn and deteriorating liquidity, according to sources. Octus’ Nine Energy Service coverage is HERE.

Georgia Proton Therapy Center

Atlanta-based proton therapy cancer treatment center filed chapter 11 on Jan. 22 in the U.S. Bankruptcy Court for the Northern District of Georgia. The debtor carries about half a billion in bond debt and says it “understands” that it has the support of a “majority” of its senior bondholders to pursue a chapter 11 sale.

The debtor has a stalking horse agreement with Emory University, acting on behalf of Emory University Hospital of Midtown, to buy all assets as a going concern, with a headline bid of $110 million. Georgia Proton’s proposed bid procedures would set an April 17 bid deadline, with an auction on April 20 if the debtors receive viable alternative bids.

The debtor is not seeking DIP financing and intends to fund the case through the consensual use of cash collateral. A first day hearing has been scheduled for Monday, Jan. 26, at 10 a.m. ET. Octus’ coverage of Georgia Proton Therapy Center is HERE.
 

First Brands Group

Martin De Luca, the chapter 11 examiner in the First Brands cases, made his first court appearance on Thursday. Reporting on the status of his investigation, the examiner said “numerous witnesses” indicated that “Patrick James and his team began planning for an exit from First Brands in 2024” and expressed concerns about value being quietly transferred to nondebtor entities.

At the same hearing, Judge Christopher Lopez indicated he will enter an agreed order granting the Carnaby secured lenders relief from the automatic stay to enforce their rights against certain collateral when the parties finalize certain reservation of rights language.

The debtors will return to court next week, Thursday, Jan. 29, to ask the court to approve procedures that would govern a sale process, with a proposed Friday, Jan. 30, bid deadline and Feb. 9 auction. The debtors say they need to market their assets fast because they are projected to run out of cash for operations by the first week of February unless they obtain additional DIP funding.

Oaktree Capital Management and Anchorage Capital have taken positions in the $1.1 billion new-money portion of the DIP financing while the company tries to negotiate new financing from creditors, Bloomberg reported yesterday, Jan. 22. Octus’ First Brands coverage is HERE.

Saks Global Enterprises

At a hearing on Jan. 22, Judge Alfredo Perez authorized SO5 Digital – a subset of the Saks Global debtors – to use prepetition lenders’ cash collateral on a second interim basis through the next two weeks. The court also authorized the SO5 Digital debtors to enter into a consulting agreement with GA Retail Solutions in preparation for liquidation sales.

Debtors’ counsel said that the liquidation sales would be for SO5’s e-commerce business and not a wind-down of the physical Saks OFF 5TH stores. Counsel said the debtors have received inbound queries about the assets and will file a bidding procedures motion so they can pursue a sale process and the liquidation sales in parallel. Octus’ Saks coverage is HERE.
 

Telesat Debt Litigation

Wilmington Savings Fund Society, as administrative agent for term loan holders, filed a complaint in New York state court accusing Telesat Canada of distributing 62% of its Telesat Lightspeed low earth orbit, or LEO, business to a Telesat subsidiary, Telesat LEO CanHold, in an attempt to shield the assets from creditors. The creditors seek damages and declarations that Telesat Canada breached the credit agreement and that the “fraudulent transfer” of the LEO business is null and void. The term loan agent also filed a parallel suit against Telesat in the Ontario Superior Court of Justice seeking damages for the distribution. Telesat maintains that the suits are “without merit.” Octus’ coverage of Telesat can be found HERE.