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Tropicana to repay bank debt with proceeds of potential sale of Atlantic City property
By Sara Rosenberg
New York, Dec. 13 - Tropicana Entertainment LLC is planning on repaying its senior bank debt with proceeds of the sale of its Tropicana Casino and Resort in Atlantic City, according to a company news release.
The sale was mandated on Wednesday when the New Jersey Casino Control Commission denied the company's gaming license renewal application.
Control of the Atlantic City property will be transferred immediately to a trustee until the sale of the property can be arranged.
The trustee is required to complete the sale of the Tropicana Atlantic City within 120 days of the transfer of the property to his control, although this period of time may be extended by the Commission.
Tropicana Entertainment intends to appeal the Commission's determination through the New Jersey appellate court system.
Unless the company is successful in its appeal to stay or reverse the Commission's determination by Dec. 19, an event of default will result under its credit facility, which would entitle lenders to accelerate the debt.
And, the acceleration would then constitute an event of default under the indenture governing the company's senior subordinated notes, as well as its Las Vegas term loan.
The company intends to continue its efforts to work with the lenders under its credit facility to prevent an acceleration from occurring.
There can be no assurance that the lenders will not accelerate, which could compel the company to seek alternatives, including, without limitation, bankruptcy protection.
Tropicana Entertainment is a Fort Mitchell, Ky.-based gaming entertainment provider.
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