Regulators endorse Tropicana restructuring plan

Aug 7, 2008 7:38 PM

by Staff & wire reports | A management restructuring of bankrupt Tropicana Entertainment LLC, with 11 casino properties in the United States, was recommended Wednesday by the Nevada Gaming Control Board.

The board’s parent state Gaming Commission will have final say Aug. 21 on the new managing board headed by restructuring banker Thomas Benninger – and excluding company owner William Yung III, who initially was in line for a board seat.

"At least on paper, this is a very impressive board of managers that has been put together in a short period of time," Control Board Chairman Dennis Neilander told Scott Butera, president of Tropicana Entertainment and also one of the board members.

Neilander also said Butera has shown regulators that he has "a full grasp on the issues that are facing this company" and what’s needed to get it "on track."

Tropicana Entertainment, a subsidiary of Yung’s hotel company Columbia Sussex Corp., had been under his direct control. The changes follow Tropicana Entertainment’s May 2 Chapter 11 bankruptcy filing in Delaware.

Tropicana Entertainment has been trying to restructure part of a nearly $3 billion debt load, which stems largely from its $2.1 billion buyout of Aztar Corp. in 2007. Financial problems began after the company lost its license to operate the Tropicana Atlantic City and the economy slumped.

As part of the restructuring, Tropicana Entertainment intends to move its main offices from Crestview Hills, Kentucky, to Las Vegas, where it runs the Tropicana on the Las Vegas Strip, company attorney Mike Alonso said.

Other Nevada properties owned by the company include the Horizon and MontBleu hotel-casinos on Lake Tahoe’s south shore; and the River Palms and Tropicana Express resorts in Laughlin, on the Colorado River.

In other action, the Control Board recommended Heather Lynn Bacon for licensing as manager of the company that will run a resort to be developed at the old Tahoe Biltmore Lodge at Crystal Bay, on Tahoe’s north shore.

Bacon said various permits needed for the $250 million project will push its completion back a year, until 2015. Boulder Bay Gaming LLC wants to build an upscale destination resort on about 14 acres that would include 200 hotel rooms and nearly 180 condominiums, plus a casino, restaurants, shops, park areas and other improvements.

Some people living in the Crystal Bay area have expressed concern about the venture and potential traffic problems, but Bacon said most of the residents support the project, and talks are continuing in efforts to resolve the issues.