Posted on: 2 February 2023, 02:52h.
Last updated on: February 2, 2023, 02:52 am.
Aruze Gaming, a manufacturer of electronic gaming devices for casinos, has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the State of Nevada.
The creator of the Roll to win Craps machines also said today that US branch president Robert Ziems will be leaving the company and Global CEO Yugo Kinoshita will take over Ziems’ day-to-day responsibilities until a replacement is found.
Japan-based Aruze, which also produces electronic roulette games, among other things, said it is pursuing Chapter 11 protection after a judgment against one of its shareholders led to a garnishment against the company. The company said it will operate normally during the bankruptcy proceedings.
This submission was a critical business strategy we had to make due to external factors beyond our control. We fully understand the implications of this action, but we believe it is the best way for Aruze to maintain the overall health of our business,” Kinoshita said in a statement.
The CEO added that the bankruptcy is not a comment on the overall health of Aruze and he believes the company will emerge stronger.
Aruze Gaming Looking to reorganize
Aruze, which has its US headquarters in Las Vegas, could be angling for a corporate restructuring — one that creditors must approve — under Chapter 11.
“A case filed under Chapter 11 of the United States Bankruptcy Code is often referred to as a ‘reorganization’ bankruptcy. Usually, the debtor remains ‘in possession’, has the powers and duties of a receiver, is allowed to continue his business and, with the court’s permission, is allowed to borrow new money. A reorganization plan is proposed, creditors whose rights are affected can vote on the plan, and the plan can be ratified by the court if it receives the required votes and meets certain legal requirements,” US courts said.
That’s significantly different from Chapter 7 proceedings, which are among the most common business failures after Chapter 11. Chapter 7 is often pursued by highly indebted companies that are in going concern. In those scenarios, creditors see little hope for redemption stories and the company liquidates its assets to pay off some of its liabilities.
The situation facing Aruze is not that dire and the creator of the Rock Paper Scissors Instant Win slotmachines has the option to reach a solution with its creditors to prevent further disruptions.
Aruze has an interesting company history
In 2018, Aruze was hit with a patent infringement lawsuit. That same year, the gaming device manufacturer was involved in a legal breach with Wynn Resorts, with the casino operator paying the Japanese company $2.4 billion as a result of the forced liquidation of Wynn’s Aruze interest.
According to press reports on the website, Aruze’s clients in the US include BetMGM, Circa Las Vegas and the Seminole Tribe of Florida, which operates Hard Rock International.