Tropicana gaming license appeal heads to New Jersey Supreme Court; lawyers seek sale consultation

By Caroline Salls

Pittsburgh, Oct. 10 - Tropicana Entertainment, LLC's appeal of the Casino Control Commission's decision not to renew Tropicana's gaming license will be heard by the New Jersey Supreme Court, which could delay the timetable for a sale of the Tropicana Casino and Resort in Atlantic City for as long as a year, according to a company news release.

Tropicana chief executive officer Scott C. Butera said in the release that the company will still go forward with its plan to submit a formal petition to the Casino Control Commission to regain operational control of the property.

"We are certainly gratified by the Supreme Court's decision, and we are eager to have our day in court," Butera said in the release.

"Nonetheless, we will continue to demonstrate to all our constituents that Tropicana is a new company with a new management team in place that intends to pursue every legal and regulatory option to obtain the right to manage the Atlantic City gaming operation."

According to the release, Tropicana's lawyers have ongoing concerns about the casino sale process being overseen by justice Gary Stein. Tropicana said the lawyers sent a letter to Casino Control Commission chair Linda Kassekert detailing those concerns.

In the letter, Sterns & Weinroth said Stein announced that the Cordish Co. was the leading bidder in the casino sale, and that the justice had begun negotiating an asset purchase agreement with Cordish.

However, Tropicana's lawyers said Stein did not consult with Tropicana in connection with the Cordish bid.

In addition, the lawyers reiterated the company's position that constituencies are entitled to more information on the Cordish bid.

"If the Cordish proposal has merit, it will withstand scrutiny in the light of day," the lawyers said in the letter.

Sterns & Weinroth said it also does not agree that Stein's proposed sale time frame is realistic.

The lawyers said Stein proposes to complete his negotiations by the end of October, then draft and submit a report in time for final action at the commission's Nov. 12 meeting.

"This is simply too truncated a period of time for the regulators, the creditors, both secured and unsecured, other stakeholders, and us, the former owners of the licensee, to respond in any meaningful way," the lawyers said in the letter.

"To rush what has already been a protracted process to a premature conclusion creates the distinct impression that the transaction is, in fact, a pre-ordained fire sale."

As a result, the lawyers asked the commission to direct Stein to hold more consultations with all concerned parties before proceeding with the sale.

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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