Ex-owners: Tropicana worth no less than $950M

October 2, 2008 5:39:41 PM PDT
The former owners of the Tropicana Casino and Resort say it is worth no less than $950 million, and will try to regain control of it next week. Tropicana Entertainment LLC told a U.S. Bankruptcy Court Judge in Delaware on Thursday that the company will ask the New Jersey Casino Control Commission to allow it to retake control of the struggling casino-hotel.

New Jersey stripped the former owners of their casino license in December after nearly a year of poor performance and massive job cuts that drove customers away in droves. That triggered the appointment of a trustee to oversee operations while a new buyer is sought.

The trustee selected Baltimore-based Cordish Company as a potential buyer last week. It offered $700 million for the Tropicana.

"Our creditors, our employees and our neighbors in Atlantic City cannot afford to have this marquee Atlantic City property purchased at a severely depressed price," said Tropicana Entertainment CEO Scott Butera.

"Instead of engaging in a forced sale in the midst of an unprecedented financial crisis, we want to reinvigorate the management of the property, make significant investments in needed upgrades, and assess the options," he said. "It just seems like the prudent thing to do for everyone involved."

But Tropicana Entertainment has no power to force its way back into the picture in Atlantic City. It can only regain its casino license from the same people who took it away - the Casino Control Commission. And they have shown little inclination to return control of the casino back to Tropicana Entertainment.

The company says it is a different entity now that owner William Yung III has relinquished control of it. Tropicana Entertainment has appointed a new board with no ties to Yung, and says it now has the ability to run the Tropicana the right way.

"This is a totally new company," Butera said. "We're confident we've put together the type of company that could be approved by the commission. Except for the name, everything about Tropicana Entertainment has changed."

Dan Heneghan, a spokesman for the casino commission, said it would review Tropicana's application once it is filed, declining further comment.

Gary Stein, the retired state Supreme Court justice overseeing the Tropicana while a new buyer is sought, declined comment.

Stein tapped Cordish as a potential purchaser in a bankruptcy court auction. Other interested parties can still submit higher bids than Cordish's $700 million offer, which consists of $450 million in cash, along with $250 million in notes.

If Tropicana Entertainment cannot convince the casino commission to let it regain control of the property, Butera indicated it will likely follow through on previous threats to block the proposed sale in court. He also said the company would not try to top Cordish's bid.

"It would be awkward for us to bid on our own property," he said.

Cordish helped revitalized Baltimore's Inner Harbor, and built The Walk, a popular retail shopping district in Atlantic City.