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From Press staff reports

ATLANTIC CITY - New Jersey gaming regulators Thursday approved a restructured agreement that will protect the new buyers of the Tropicana Casino and Resort from a huge tax liability if they resell the property in a few years.

The so-called "G Reorganization" plan under the federal tax code allows investors headed by billionaire Carl C. Icahn to acquire Tropicana through a stock transaction instead of their original proposal to use $200 million of the casino debt they own.

Despite the change in the agreement, the final purchase price will remain $200 million, according to state Casino Control Commission Chair Linda M. Kassekert.

The reorganization plan, however, sets the tax value of the Tropicana at $700 million instead of $200 million. This will save the Icahn-led investors from a big tax hit if they resell the casino a few years from now for hundreds of millions of dollars more than the purchase price.

Icahn's financial experts estimated Tropicana's tax value at $700 million by using the construction costs for the casino hotel, minus the depreciation.

Barring any last-minute holdups, the investors will complete Tropicana's purchase in December or January. They bought the Boardwalk casino in a bankruptcy auction after Tropicana's previous owners were stripped of their New Jersey gaming license.

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