Tropicana Entertainment LLC said Tuesday it submitted a reorganization plan that would separate its Las Vegas casino into a company apart from its other properties.
Tropicana filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware in May, listing assets of $2.8 billion and liabilities of $3.3 billion.
Tropicana has been trying to restructure part of the $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.
In a filing with the Delaware federal bankruptcy court, Tropicana said it would create an organization named OpCo that would house 10 casinos and resorts, including sites in Atlantic City, N.J. and Evansville, Ind. The other company, dubbed LandCo, would consist of the Tropicana Las Vegas casino.
The reorganization would include plans to have the secured portion of OpCo's $2.3 billion debt converted to common stock and the unsecured portion canceled. LandCo's $442 million secured debt would be converted to equity.
Tropicana would also retire $67 million outstanding in a debtor-in-possession financing agreement and would fully pay some administrative and tax claims.
William Yung III's ownership interests would be canceled and he would not have equity in the reorganized company. Yung III stepped down as an officer of the Crestview Hills, Ky.-based company in June and signed away his right to control it, though he still owns it.
Tropicana said it anticipates $275 million in capital investments over the next five years to refurbish and revamp its casinos and resorts.
Besides its Tropicana resort on the Las Vegas Strip, the company's other Nevada properties 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.