The Las Vegas Sun reports that the stock of Riviera hotel-casino owner Riviera Holdings Corp. took a dive today when the Las Vegas company missed a $4 million interest payment due yesterday. Riviera stock traded at $1.07, down 40 cents or 27 percent. The company said its casino properties in Las Vegas and Colorado continue to generate positive cash flow, despite the recession, but that it's not generating enough cash to make its loan payments. Riviera reports that the company’s accountant issued a warning that expresses substantial doubt about Riviera's "ability to continue as a going concern.'' This is a term that that accountants usually use to warn of a possible bankruptcy.
"The deteriorating trends in revenue and earnings experienced during the first three quarters of 2008 continued as evidenced by our fourth quarter results and accelerated during the first quarter of 2009,” noted William L. Westerman, Riviera’s chairman and CEO in a statement. “We expect this situation to continue as long as competitors in the Las Vegas market follow a strategy of sacrificing ADR (average daily room rate) to maximize room occupancy and the decline in convention business is unabated.”