Tropicana seeks to take over Atlantic City casino; asks to set minimum sale price of $950 million

By Jennifer Lanning Drey

Portland, Ore., Oct. 2 - Tropicana Entertainment, LLC plans to submit an application next week to the New Jersey Casino Control Commission for permission to assume operational control over its Atlantic City Casino & Resort, according to a company news release.

The application is a key component in a reorganization framework that contemplates a minimum acceptable sale price for the casino of $950 million in cash.

Tropicana's official committee of unsecured creditors supports the framework, according to the release.

If Tropicana assumes control of the casino, it will petition to have the property integrated with its other holdings and placed under the jurisdiction of the bankruptcy court. The move would give Tropicana's new management the ability to tap financing and other resources to make needed capital improvements to the facility, Tropicana said.

"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, Scott C. Butera, Tropicana's chief executive officer, said in the release.

"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. It just seems like the prudent thing to do for everyone involved."

Achieving casino value

Tropicana told the court in a Thursday filing that within 45 days of regaining control, it would submit a detailed work plan for upgrading casino operations and performance.

Within 60 days of submitting that plan, the company said it would deliver its assessment of how to achieve the highest value for the casino.

If the best option is a sale, Tropicana wants to conduct an auction setting the minimum price of the casino at $950 million.

If the company decides the best value alternative is to defer the sale and continue operating the casino, Tropicana said it would include the property in its plan of reorganization.

Additionally, Tropicana noted Thursday that its plan of reorganization would reconfirm the company's prior termination of all agreements and relationships with former owner William J. Yung. The company added that upon emergence from bankruptcy Tropicana would have entirely new ownership and expects to have the necessary capital to support its long-term business plan.

Tropicana, a Fort Mitchell, Ky.-based gaming entertainment provider, filed for bankruptcy on May 5 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 08-10856.

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