April 14 (Bloomberg) -- Station Casinos Inc., the gambling company taken private by Colony Capital LLC in 2007, won a 30- day extension from lenders, allowing debt negotiations to continue ahead of a planned pre-packaged bankruptcy filing.

Creditors agreed not to exercise default rights until May 15, extending a deadline that was due to expire tomorrow, Station spokeswoman Lori Nelson said today in an e-mail.

The extension allows Station “to continue ongoing discussions regarding the terms of our restructuring with the lenders and the holders of the notes,” Nelson said.

Station, based in Las Vegas, has skipped its bond interest payments since February. The forbearance, granted by lenders in exchange for higher interest rates, has been in effect while the company, owned by Colony and the founding Fertitta family, negotiates with banks and noteholders. The company had $5.78 billion in long-term debt as of Dec. 31.

Station didn’t disclose how many bondholders have agreed to accept the company’s offer of 10 cents to 50 cents on the dollar in secured notes and cash as of their April 10 deadline. The company made the offer to holders of about $2.3 billion of bonds as part of the Feb. 3 bankruptcy proposal.

Under Chapter 11 bankruptcy regulations, unsecured bondholders who account for two-thirds of the value of senior notes and two-thirds of subordinated notes have to agree with the prepackaged plan before it is filed.

As part of the proposal, affiliates the Fertitta family and Tom Barrack’s Colony Capital agreed to invest as much as $244 million to maintain current ownership stakes.

The company rejected a Feb. 23 offer by Boyd Gaming Corp. to buy Station’s unsecured assets. Station said in March it had no plan to sell assets and will proceed with its restructuring.

The Fertittas and Colony, a Los Angeles-based private equity firm, paid $90 a share, or $5.4 billion, and assumed about $3.3 billion in debt in the November 2007 takeover of Station. Deutsche Bank AG and JPMorgan Chase & Co. affiliates provided debt financing.

Station owns 18 casinos, including Red Rock Casino and the five-month-old Aliante Station. The company was founded by Frank Fertitta Jr. as a Las Vegas bingo hall in 1976, and now focuses on attracting gamblers who live and work in Nevada’s Clark County.

The company has struggled to pay creditors in a market among the hardest hit by deteriorating home prices and recession-driven job losses. Gambling revenue in Las Vegas fell the most on record last year.

To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net

Last Updated: April 14, 2009 21:11 EDT