Bankruptcy puts crimp in Tropicana sale

Jun 3, 2008 7:03 PM

by Ray Poirier |

Tropicana Entertainment LLC, the casino operating arm of Columbia Sussex Inc., filed for bankruptcy protection last month, listing assets of $2.8 billion and liabilities of $3.3 billion.

Unfortunately, the filing is being used by regulators as the reason for the delay in the sale of two of the company’s major properties, the Tropicana Casino and Resort in Atlantic City and the Casino Aztar riverboat in Evansville, Indiana.

In the case of the Casino Aztar, Eldorado Resorts LLC of Reno, Nevada, has already agreed to pay about $245 million to acquire the facility. But, Ernest Yelton, executive director of the Indiana Gaming Commission, said the bankruptcy could delay the sale since the bankruptcy court would have to approve the transaction.

Former N.J. Supreme Court justice Gary Stein, who was delegated the responsibility of selling the Tropicana in Atlantic City after the company had its license pulled, has asked for additional time to complete the process.

"The best approach," Stein wrote to the Casino Control Commission, "is to reject all outstanding bids and to re-start the sale process. My financial advisers and I have received expressions of interest from potential buyers – some as recently as in the last week. However, the Tropicana Entertainment Chapter 11 proceedings have impacted the sale process, and I believe the best course of action is an extension of the sale process."

Should the commission grant the delay, the action could have a significant impact on the Cordish Company and its partner, longtime gaming executive Dennis Gomes, who announced last week that they had the necessary funding in place and were ready to acquire the troubled casino.

The commission will consider Stein’s request at its next meeting.

Stein has refused to say just how many bids he received for the property but in addition to Cordish the Colonial Capital Group, owners of two casinos in Atlantic City as well as others in other parts of the country, has publicly stated its interest in the proceedings.