More time sought to complete Tropicana sale
By DONALD WITTKOWSKI
Staff Writer, 609-272-7258
Published: Wednesday, October 08, 2008
ATLANTIC CITY - With a crucial deadline looming, the conservator overseeing the sale of Tropicana Casino and Resort filed papers Tuesday asking for another month to wrap up a deal with the leading bidder for the gaming hall.Gary S. Stein, a retired New Jersey Supreme Court justice who has been in charge of Tropicana since it was stripped of its license in December, wants the state Casino Control Commission to approve an extension to Nov. 12.If granted, it would be the fourth time that Stein has been given an extension of the sale deadline. Most recently, the commission approved a 120-day extension to Oct. 16. Commission spokesman Daniel Heneghan said Stein's request for another extension to Nov. 12 is expected to be heard at the Oct. 15 board meeting.Stein said in his papers Tuesday that he needs more time to negotiate an agreement with the Cordish Co., a Baltimore developer that he has selected as Tropicana's lead bidder. Cordish has offered $700 million in cash and notes for Tropicana, but has also made an all-cash bid of $575 million as an alternative.Stein indicated that he expects to complete a deal with Cordish by the end of October. He would then submit the proposed agreement to the commission for final approval by Nov. 12.
Tropicana Entertainment LLC, the casino's former owner, argues that the property is worth at least $950 million and has criticized Cordish's offer as a "fire sale" price. The company is threatening legal action to block the sale.At the same time, Tropicana Entertainment is planning to file its own petition with the commission asking regulators to give it back control of the casino. The company says it has undergone a dramatic management and corporate restructuring since it lost its New Jersey gaming license and deserves a second chance at running Tropicana."We are essentially a new company. We have the financial and managerial resources to come in and turn this thing around," said Scott C. Butera, Tropicana Entertainment's new chief executive officer.Butera said there is a possibility that his company may look to buy an existing Atlantic City casino or build a new one if it is unable to persuade the commission to give it back the Tropicana.Tropicana Entertainment was denied a new license after a tumultuous reign of declining revenue, mass layoffs, regulatory violations and customer complaints of filthy rooms and overflowing toilets. Since that time, Butera has replaced William J. Yung III, the former CEO blamed for a bare-bones operating philosophy and hundreds of layoffs that left the casino understaffed and dirty.Butera said he fears that a prolonged search for a new buyer could further harm Tropicana at a time when its operating profits have declined about 20 percent and its gaming revenue is down nearly 10 percent."This is what we are concerned about," Butera said of the prospect of further delays. "Whether it takes a year or whether it takes another three months, our issue is that this is an asset that is continuing to underperform."Joel Sterns, an attorney representing Tropicana Entertainment, estimated that it could take up to a year for Stein to complete Tropicana's sale. He warned of bankruptcy complications and other circumstances that could drag out the deal."I would guess that any agreement they come up with would have contingencies that would take a year," Sterns said.Sean Mack, an attorney with Stein's Hackensack law firm of Pashman Stein, declined to comment Tuesday.In the meantime, Stein and his firm continue to collect fees for their role in overseeing the sale. Stein, who is paid $650 per hour, and his firm have earned more than $1 million in fees so far.E-mail Donald Wittkowski:DWittkowski@pressofac.com
Print Story
Email Story
