No deal in Tropicana casino sale - Wednesday 4th of February 2009

There is a chance that the "stalking horse" that wants to buy Tropicana Casino and Resort may not finish the race or even get out of the starting gate.

Cordish Co., the Baltimore developer designated last fall as the so-called stalking horse, or leading bidder, in Tropicanas protracted sale, missed a deadline Monday to reach agreement to buy the troubled casino.

Gary S. Stein, the state-appointed conservator overseeing Tropicanas operations, responded by petitioning the New Jersey Casino Control Commission to extend the sale for at least three more months. He also wants permission to have Tropicana sold in a bankruptcy auction without a minimum bid from a stalking horse if no agreement is reached with Cordish or another potential buyer by Feb. 20.

Stein, a retired New Jersey Supreme Court justice, said Cordish hasnt come to terms yet despite intense negotiations that continued through the weekend. He added that Cordish is still "actively engaged" in the talks.

"They certainly have not withdrawn," Stein said.

David S. Cordish, chairman of the company, also confirmed in a brief e-mail Monday that he still hopes to buy Tropicana.

"We continue to be very interested and are continuing to work with Justice Stein and the creditors," Cordish said.

The Casino Control Commission gave Stein some wiggle room in case he didnt meet Mondays deadline to reach agreement with Cordish. He exercised it Monday afternoon by petitioning the commission for an extra three months and to possibly have Tropicana sold in bankruptcy without a stalking horse.

The stalking horse has the inside track on a sale, but is also supposed to generate interest among other potential buyers to drive up the bids. Stein disclosed in his petition that Tropicanas creditors strongly objected to Cordishs proposed purchase price and likely would have tried to block the sale if Cordish continued in the role of leading bidder.

Gilbert L. Brooks, an attorney representing secured creditors who hold a $1.3 billion mortgage on the Tropicana casino, said it will be up to the commission to decide how the bankruptcy auction should proceed now that Cordish appears out as the front-runner.

"The process itself was not set up specially for Cordish," Brooks said. "It was set up to create the best bid for the property."

The commission is expected to sort out the mess when it holds its regularly scheduled meeting Feb. 18. Stein stated in his petition that he would file for bankruptcy "as soon as practical" following that meeting.

"Upon the initiation of the bankruptcy, Justice Stein would ensure that appropriate orders are sought on the first day to ensure the stability and the uninterrupted operation of the casino," the petition said.

Tropicana has been under Steins control and up for sale since the commission yanked its gaming license in December 2007 following mass layoffs and regulatory violations. The recession, the global credit crisis and legal disputes have slowed the sale process to a crawl.

Cordish initially offered $700 million in cash and notes or $575 million in an all-cash deal when it was named the leading bidder in September. Since that time, the recession has deepened and Tropicanas financial performance has slipped even more. Cordish has now lowered its offer to an undisclosed amount to reflect the economic slump.

Tropicanas creditors fear the casino will be sacrificed at a bargain-basement price and they would end up with little money or nothing at all. Instead of a sale, they want the casino returned to its former owner, Tropicana Entertainment LLC.

Under that scenario, Tropicana Entertainment would enhance the value of Tropicana Atlantic City by combining it with the companys portfolio of casinos in Nevada, Mississippi, Louisiana and Indiana. It would also mean that the Casino Control Commission would have to relicense Tropicana Entertainment - 14 months after it found the company unfit to own an Atlantic City gaming hall.

Brooks said Tropicana Entertainment has since overhauled its corporate and management structure to create what is essentially a new company. He also said the company is working to restructure its debts in bankruptcy court to strengthen its finances and switch to new ownership.

"It may have Tropicana somewhere in the name, but it will be a new company," Brooks said. "It will be a completely new organization."

Other news from around the same time

Casino billionaire bankrolls Labor - Wednesday 4th of February 2009

Figures linked to Macau-based casino magnate Stanley Ho have donated well over $1 million to the Lab....

Betfair demands all gambling operators set limits - Wednesday 4th of February 2009

ONE of Australias biggest online betting agencies has challenged racing ministers to force all gambl....

Maryland gets 6 slot machine bids for 5 licenses - Wednesday 4th of February 2009

Maryland received bids for fewer slot machines than state officials had hoped for Monday, as develop....

Holland Casino plans major investment - Wednesday 4th of February 2009

State-owned Holland Casino, which has a monopoly on the Dutch casino market, wants to invest ‘hundre....

Melbourne Casino comes good on pokies refund promise - Wednesday 4th of February 2009

Almost all of the 1,200 people playing poker machines at Melbournes Crown Casino when it was evacuat....

All aboard for the big casinos - Wednesday 4th of February 2009

The first clues that this could be a different kind of railroad experience are in a passenger guide ....

Casinos See Big Super Bowl Weekend - Wednesday 4th of February 2009

Las Vegas will get a much needed economic boost this weekend as 295,000 people are expected to watch....


Gibraltar’s new Gala Casino has opened its doors in the heart of the Ocean Village complex. An inves....

Great Yarmouth casino and leisure scheme approved - Wednesday 4th of February 2009

Great Yarmouth District Council has granted planning permission for a 250,000 sq ft leisure scheme i....

Trump casinos get deadline extension - Wednesday 4th of February 2009

Donald Trumps struggling casino company today won a two-week reprieve to continue talks with lenders....