N.J. To Seek Tropicana Sale At Auction
Posted in the Pinnacle Entertainment Forum
Since: Feb 08
#1 Feb 2, 2009
APNewsBreak: NJ to seek Tropicana sale at auction
APNewsBreak: With no deal reached with suitor, trustee seeks auction of Tropicana Casino
* Wayne Parry, Associated Press Writer
* Monday February 2, 2009, 5:28 pm EST
ATLANTIC CITY, N.J.(AP)-- Without a deal in place to sell the Tropicana Casino and Resort to a Baltimore company, the state trustee overseeing the gambling hall asked for permission Monday to sell it at a bankruptcy court auction.
Retired state Supreme Court Justice Gary Stein filed a petition with the state Casino Control Commission seeking to sell the casino at auction, but without a minimum bid from a company that had been chosen as a potential buyer.
That potential buyer, the Cordish Co. of Baltimore, continues to negotiate to buy the casino, which has been operating under state supervision since its former owners were stripped of their casino license in December 2007. But Stein had to act Monday to meet a deadline the commission set last month.
"We're negotiating around the clock and throughout the weekend," Stein said. "But we don't have an agreement."
Stein said he is confident that Cordish will eventually sign a deal to buy the Tropicana.
In an e-mail, company Chairman David Cordish said, "We do share his optimism." He declined to comment further.
Subsidiaries of Kentucky-based Columbia Sussex Corp. slashed nearly 1,000 jobs soon after buying the casino in January 2007. That soon led to problems with cleanliness, service and compliance with state casino regulations.
Guests complained of filthy hotel rooms, overflowing toilets, bedbugs and roaches, and thick dust. Some slot machine winners also had to endure long waits for jackpot payouts.
The casino has continued to operate under interim management, which has addressed those problems as it tries to win back customers that deserted the Tropicana.
When the former owners lost their license, state law required the casino to be sold to someone else.
If approved, the auction would proceed without a $700 million bid that Cordish had offered last year, before the economy crashed. Cordish has reduced its bid, but Stein and company officials won't say by how much.
Stein had proposed selling the casino under the federal bankruptcy code, with Cordish acting as a so-called "stalking horse." That means Cordish would offer a set amount for the casino that would become the minimum bid for it.
If other parties wanted to bid higher, they could do so. If none did, Cordish would get the casino for the amount it bid.
Stein said nothing negative should be read into proceeding without a deal in hand, saying that was something that had long been envisioned as a possibility.
In his petition, Stein asked the casino commission to extend the sale period for three months to permit the bankruptcy court auction. The commission will consider the request Feb. 18.
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