Restructuring advisers may speed sale of Tropicana

December 10, 2008 11:04:18 AM PST
The final pieces are falling into place before Atlantic City's Tropicana Casino and Resort is sold at a bankruptcy court auction. The state Casino Control Commission on Wednesday approved the hiring of financial restructuring advisers to assist with the sale of the casino.

The state-appointed trustee preparing the casino-hotel for sale, retired state Supreme Court Justice Gary Stein, has said he intends to take it into bankruptcy court and conduct an auction under Section 363 of the federal bankruptcy code.

That would involve having a potential purchaser - Baltimore-based Cordish Company - in a bankruptcy court auction. Other companies would have the opportunity to bid above Cordish's $700 million offer. If not, Cordish would get the casino.

The commission approved Stein's request to hire J.H. Cohn of Edison to assist with the bankruptcy sale, which could be consummated by the end of January.

A lawyer for Stein, Sean Mack, would not say when the retired justice might file the paperwork to start the bankruptcy sale.

In a report to the commission, Stein said he and his firm have already engaged in discussions with interim management at the Tropicana about how to retain employees and pay them after the bankruptcy filing.

The commission stripped the Tropicana of its license last December after less than a year of poor performance that included massive layoffs. That created problems with cleanliness and customer service, as well as compliance with state gambling regulations.

The casino has remained open under Stein's supervision.

The sale is proceeding despite efforts by the former owners, Tropicana Entertainment LLC, to regain control of it.

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