Trop owners say $700 million too little

Oct 7, 2008 5:08 PM

by Ray Poirier | Owner and former operator of the Tropicana Casino and Resort in Atlantic City, Tropicana Entertainment LLC, a division of William Yung’s Columbia Sussex, is crying foul over what it describes as an extremely low bid being offered for the property.

The Kentucky-based company is running to the U.S. Bankruptcy Court in Delaware to complain about the offer being made by the Cordish Company of Baltimore, Maryland. Cordish’ latest offer is $700 million while Tropicana Entertainment contends the property is worth $950 million.

To sweeten the deal, approved by Trustee Gary Stein, the retired state Supreme Court justice appointed by the N.J. Casino Control Commission to preside over the sale of the property, Cordish has offered to add a $100 million face lift if the deal goes through.

Stein, meanwhile, points out that there has not been any larger bid to top that of Cordish.

When the Cordish offer was announced, Tropicana Entertainment issued a statement saying, "Today’s disclosure does nothing to allay our worst fears about the fire-sale nature of the current process." It immediately went to the bankruptcy court saying it planned to appeal to the Casino Control Commission to allow it to retake control of the struggling casino property.

The country’s economic slowdown has placed all Atlantic City casinos under pressure.

From information gleaned from the trustee, Cordish had made two offers for the Trop. The first involved $450 cash, along with $250 million in notes. The other was for $575 million, to be all-cash.

Cordish, which has allied itself with longtime casino executive Dennis Gomes, developed and operates The Walk shopping district in Atlantic City.