Staff & Wire Reports | Making it abundantly clear that William J. Yung does not and will not have any influence or control over the company, Tropicana Entertainment last week petitioned the New Jersey Casino Control Commission (CCC) to regain operating authority over its casino and resort in Atlantic City.
According to company CEO Scott C. Butera, Tropicana wants to run the casino because it believes that there is a better chance of reversing the property’s 48 percent decline in gross operating profits if it is integrated with a larger organization with the financial assets and human resources to invest in its future. The property has been under the control of a CCC-appointed conservator since last December.
"We have assembled a strong, highly competent new management team that is experienced in the Atlantic City market," said Butera, who himself holds a New Jersey casino key employee license. "We want to immediately deploy our managerial and financial resources to serve the gaming public and provide tax and employment benefits to the community.
"The need for this action has been made more urgent by the decision of the New Jersey Supreme Court to hear Tropicana’s appeal to regain its status," Butera said. "The conservator’s sale process for the property, which we continue to support as a way to determine the credibility of current indications of interest, could be delayed for several months, far too long for the casino to be without the benefit of well-financed, professional casino management."
The petition asks the CCC to appoint a company co-conservator of the property and give him the authority to bring the casino under Tropicana Entertainment’s corporate umbrella where it will have protections afforded under Chapter 11 of the Bankruptcy Code. Tropicana said it will then install a new management group at the property and make investments to improve the casino’s business so that it can be either sold at a fair price or realize its longer term value as a going concern within Tropicana’s current corporate structure.
If the CCC grants the petition, Tropicana will move to file the appropriate applications for a gaming license and ask the Commission to convene hearings – "as soon as practicable" – to establish that the newly constituted Tropicana is qualified to hold a casino license.
The petition asserts that Tropicana qualifies for a New Jersey license by virtue of the fact that the company has been "utterly and completely reformed." Mr. Yung is no longer involved and neither he nor the senior corporate team he had in place have any influence or control over the affairs of the company. The company anticipates that Mr. Yung’s interests will be "cancelled and extinguished" upon consummation of the Chapter 11 reorganization plan. A CCC-appointed co-conservator can provide oversight and supervision to ensure that any CCC regulatory concerns with respect to Mr. Yung’s interests are addressed.
"Tropicana is a brand new company," said independent board member and former CCC Chairman Bradford Smith. "We have a new, independent board. We have a new team of experienced professional gaming executives managing our operations. Most important, we live by a set of business and operating philosophies that are in keeping with the best practices of a modern day gaming enterprise."
As evidence of the company’s transformation, the petition notes a series of positive accomplishments on the part of the new management team. Among them are the separation from Columbia-Sussex Corporation, the establishment of headquarters in Las Vegas, arranging debtor in possession financing, and obtaining the approval of the Nevada Gaming Commission to operate the company’s five casinos in Nevada. It also cites Butera’s direct involvement in achieving a long-delayed labor agreement with the culinary union at the Tropicana Las Vegas.