How ’bout “Frankie & Lon’s Shack o’ Slots”?

So, will $10 billion Viva precede or follow those condo towers next to Palace Station in the grand Station scheme of things?

There are any number of gaming companies about which one can write with approbation. Station Casinos is not among them. Its history includes some serious ethical scrapes (to put it diplomatically) and it currently looks as though Frank III and Lorenzo Fertitta‘s reward for essentially crashing the company into a brick wall will be court sanction to buy it back at a dime-store price. However, whatever one thinks of the Fertittas and their ceaseless machinations, the word “stupid” never, ever comes to mind.

Until today, perhaps. Attorneys for the bankrupt casino company are floating the notion of removing the “Station” name from their core properties. Even the New Coke of casinos, proposed “MGM Resorts International,” retains MGM as part of the brand. Les freres Fertitta would flush Station’s brand equity altogether. Unless … this is some slick and clever ploy to scare bidders away from the non-core assets by suggesting that Station is going to tank its own brand name, debasing the value of the rest of the 18-casino chain. (And is key player Deutsche Bank down with the expensive rebranding that would have to be done, if push came to shove — never mind waiting for the new moniker to gain traction?)

The downfall and bankruptcy of Station, the most morally depressing casino saga of the last decade, has played out like one big game of chicken as the Fertittas seek to bend their creditors to their will … usually with success. Or, as bondholders put it, offering “sham auctions, one sided ‘compromises’ and conclusory, opaque rationales for their proposed actions.”

Helpfully, bankruptcy judge Gregg Zive has a doormat for Station from Day One. Scarcely had hearings begun before Zive was batting his eyelashes at Station and its main allies. The “solution” proposed by Station is pretty rich: It would be allowed to choose the new owner of its non-core assets before the next hearing can be held.

Mama’s Place. Gee, what do you think the chances are that the lucky bid will be that submitted to the Fertittas by stalking horse — in more senses than one — Fertitta Gaming? (Its Oct. 19 incorporation date suggests the convoluted plan before the court was long in the works.) Station has even woven a poison pill or two into its proposal. Any potential owner of Texas Station would face the uncomfortable knowledge that, regardless of who gets the casino, the underlying land belongs to Frank and Lorenzo’s mother. The lads don’t have to pay anything extra if Elaborate Charade LLC, er, Fertitta Gaming’s bid is accepted by Fertitta-steered Station Casinos. However, any other bidder would have to pony up at least $48 million to Mama Fertitta (and possibly far more) for the privilege of owning the dowdy casino that sits atop her acreage. Sweet, huh?

The judge waved away rival reorganization plans as a “distraction.” Yes, jurisprudence is so tiresome, isn’t it? Never mind that some of the parties offering alternative plans might actually have a stake in the outcome … like the unsecured creditors who currently hold a Boarding Pass for an express train to a royal screwing. If current reportage of the story is a reliable indicator, it’s pretty much a done deal that the Fertittas will be able to redraw the critical, $2.48 billion commercial mortgage-backed assets to include the “Viva” site currently occupied by Wild Wild West, as well as a plot along I-15 south of the Strip. If so, that’d be shameless self-dealing, to say nothing of a mighty juicy “throw-in.”

(Hindsight being 20/20, the Fertittas should have developed the latter before Michael Gaughan‘s South Point and Anthony Marnell‘s M Resort ate their lunch. Instead we got Red Rock Resort and $662 million curate’s egg Aliante Station. Woulda, shoulda, coulda.)

Zive certainly sounds like a jurist who can be led about by his nose. “It’s inconceivable that sophisticated lenders did not do their due diligence,” he opined naively, “and should have anticipated what would have occurred if there was a default like we had in this economic crisis.” Inconceivable? It’s damned conceivable, especially when you’re paying — what? — 12X EBITDA for non-Strip properties at the height of a real estate bubble. Undone due diligence has been the undoing of Las Vegas, something which most people other than Zive grasp quite well.

The Mark: Colony Capital CEO Tom Barrack

The judge might have to fight for the Dunce Cap with Colony Capital CEO Tom Barrack, seen above with Resorts Atlantic City, a duff investment which he recently surrendered to creditors. Barrack evidently never tires of being played for a chump by the Fertittas. After having made an astonishingly bad bet on the Station acquisition, Barrack is going back to his investors for the money to finance Fertitta Gaming’s acquisition of … itself, basically.

When Colony settled for 4% ownership as part of the deal that gave 50% to the Deutsche Bank-led syndicate and the rest to the Fertittas, my hunch was that Barrack’s billions were being held in reserve to finance some empire rebuilding. So it is. After all, this is the guy who held 76% of Station equity at one time, yet surrendered control of the board to the minority-owning Fertittas. Way to safeguard your investment, Tom! (To say nothing of the acumen that turned a 76% stake into almost nothing.)

One of the few sane developments to emerge from the moral and ethical swamp that is l’affaire Station comes from Club Fortune Casino Managing Director Jay Fennel. Unlike some wannabe Station owners (Boyd Gaming, for one), Fennel’s Silver State Capital Advisors would make a logical acquirer of seven miscellaneous Station-owned grind joints, including the Wildfire chain. That’s not a niche in which either Boyd or possible buyers like Cannery Casino Resorts or Penn National Gaming have a deep presence or interest, so it would make a near-inevitable fit were Fennel able to peel away that third of the Station portfolio.

While Boyd has already offered to pony up nearly $1 billion — more than the unsecured creditors could muster — for the two-thirds of Station that exclude Palace Station, Wild Wild West, Sunset Station, Red Rock and Boulder Station, without those trophy assets the game hardly seems worth the toss. What would be most entertaining — and probably better for the market as a whole — would be if Zive were to reject the Station-crafted plan, throwing the whole kit ‘n kaboodle up for auction. Like allied powers fighting over the spoils of a conquered empire, operators great and small could grapple for whatever casinos they could wrest unto themselves. A more fragmented, competitive Vegas-locals casino market would be a positive for both the economy and the consumer.

So what are the chances we’ll see that happen? Oh, somewhere south of zilch, I’m afraid.