Nine months ago, Tropicana's prized asset, the Tropicana Casino & Resort in Atlantic City, N.J., was wrestled from its control after a series of ugly hearings before the New Jersey Casino Control Commission. Since that time, and particularly since former CEO William Yung was ousted from the board of directors, Tropicana has made it well known that it is hoping to get the casino back.
Yet here is where the situation gets interesting.
Gary Stein was hired by the NJCCC as conservator with the job of selling the facility in what is widely known as a down market for casino valuations. Tropicana doesn't want that to happen, feeling its former cash cow will fetch a fire-sale price. Now both Stein and Tropicana are leaning on each other. Stein has revealed a $700 million bid for the casino from Cordish Co., and wants to use the Chapter 11 proceeding to subject it to an auction. Tropicana, meanwhile, wants to block the sale and incorporate the casino into its bankruptcy.
This battle presents a mish-mosh of procedural issues. For example, what standing does Stein have to sell the Tropicana AC -- which is not a debtor in the Chapter 11 case -- through a bankruptcy auction? Tropicana CEO Scott Butera told The Deal last week that he felt there were "a lot of presumptions" in the Cordish offer, and in particular, the plan to conduct the auction within the bankruptcy court. He even admitted that he wasn't sure how the deal would be carried out.
Conversely, Tropicana has yet to even petition the NJCCC to try to reclaim the casino, with the commission making it clear that the Cordish offer has absolutely nothing to do with Tropicana itself. The next move by either group -- whatever that is -- certainly bears watching. -
Ben Fidler
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