New Jersey Supreme Court to hear Tropicana appeal
By DONALD WITTKOWSKI
Staff Writer, 609-272-7258
Published: Saturday, October 11, 2008
ATLANTIC CITY - Keeping the case alive and complicating efforts to sell the casino, the New Jersey Supreme Court has agreed to hear Tropicana Casino and Resort's appeal to regain its license.Tropicana Entertainment LLC, the casino's former owner, issued a statement Friday contending that the court case may delay Tropicana's sale until late next year."The timetable for a sale of the Tropicana Casino and Resort will likely have to be adjusted until the case is heard and a decision rendered, which could take as long as a year," the statement said.It appeared the lawsuit was over in July when a three-judge state appeals court unanimously upheld the New Jersey Casino Control Commission's decision last December to strip Tropicana and its former owner of their license and put the gaming hall up for sale.However, the Supreme Court agreed to hear Tropicana's appeal in a one-page order signed Monday by Chief Justice Stuart Rabner. No hearings have been scheduled yet.
Analysts have noted that Tropicana and Tropicana Entertainment would have a difficult time persuading the courts to overturn the action of a state regulatory agency. Essentially, Tropicana will have to prove that the Casino Control Commission ignored the evidence in denying the license."The commission anticipates it will defend its decision before the Supreme Court," spokesman Daniel Heneghan said. "This decision was already unanimously upheld by a three-judge appeals panel. We think they reached the right decision and anticipate the Supreme Court will do the same."Praising the Supreme Court, Tropicana Entertainment Chief Executive Officer Scott C. Butera said the company will keep battling to regain its license and the casino. He said Tropicana Entertainment has undergone a dramatic management and corporate restructuring since it was denied the license and deserves a second chance at running Tropicana."We are certainly gratified by the Supreme Court's decision and we are eager to have our day in court," Butera said. "Nonetheless, we will continue to demonstrate to all of our constituents that Tropicana is a new company with a new management team in place that intends to pursue every legal and regulatory option to obtain the right to manage the Atlantic City gaming operation."Tropicana lost its license following a turbulent period of mass layoffs, regulatory violations and unsanitary conditions ranging from bedbug-infested guest rooms to overflowing toilets.The casino has been placed under the control of a state-appointed conservator who is overseeing its sale. Attorneys, though, have said that the sale can't be completed until the courts make a final ruling in Tropicana's appeal.Gary S. Stein, the conservator, could not be reached Friday for comment on the Supreme Court's order. Stein is a retired New Jersey Supreme Court justice now in private practice.At the same time it is fighting the loss of its license, Tropicana Entertainment is threatening a lawsuit to block the casino sale. Tropicana Entertainment is also preparing to file papers next week with the commission asking for permission to regain control of Tropicana."We care a lot about the asset," Butera said. "We like the asset. We want to do a lot to support our constituents."Complicating matters even more, Stein is facing a deadline Thursday to complete Tropicana's sale. However, he has asked the commission to extend the deadline to Nov. 12 to give him more time to complete negotiations with Tropicana's lead bidder, the Cordish Co. But that timetable has been thrown into doubt by Tropicana Entertainment's appeal.Cordish, a Baltimore developer, 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 last week 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 its final approval by Nov. 12.Tropicana Entertainment argues that the casino is worth at least $950 million and has criticized Cordish's offer as a "fire sale" price. The company also sent a letter Friday to the Casino Control Commission objecting to the way Stein has conducted the sale negotiations and his refusal to release more details about Cordish's bid.E-mail Donald Wittkowski:DWittkowski@pressofac.com