NY firms may help with Tropicana sale

January 11, 2008 10:47:44 AM PST
The trustee overseeing the Tropicana Casino and Resort wants to hire two prestigious New York firms to help prepare for a sale of the property, whose former owners were stripped of their license last month. Retired state Supreme Court Justice Gary Stein said Friday he has chosen investment bankers Bear Sterns, and the law firm of Debevoise & Plimpton to help him find a buyer for the Tropicana, analyze offers, and to close the deal hopefully by the end of April.

The state Casino Control Commission is expected to approve his request at its meeting next Wednesday.

The commission voted not to renew the Tropicana's license and found that its owners, Kentucky-based Columbia Sussex Corp., were incapable of running the type of first-class casino hotel required under new Jersey law.

That decision triggered the activation of a trust and the appointment of Stein as a conservator. In that position, he is charged with keeping the casino open and operating while finding a qualified buyer for it.

"I interviewed a number of investment bankers and attorneys who specialize in merger and acquisition work," Stein said. "I feel that this team will enable me to develop a fair process, find a suitable buyer and obtain the best price for the Tropicana."

Analysts expect the casino to be sold for about $1 billion. The move comes as about two dozen prospective buyers have expressed interest in the Tropicana, which includes New Jersey's largest hotel at 2,129 rooms.

The Bear Stearns team will be headed by Kenneth Shea, the senior managing director in charge of Bear Stearns' gambling-industry investment banking, and Charles Edelman, the global head of Bear Stearns' mergers and acquisitions.

Stein said both men have more than 10 years of experience providing investment banking services to the gambling industry.

He chose Bear Sterns from among a dozen different investment banking firms.

The Debevoise legal team will be lead by Michael Blair, the chair of Debevoise's corporate department.

By law, Stein has at least 120 days to find a suitable buyer for the Tropicana, but the commission can extend that deadline for good cause. Commission chairwoman Linda Kassekert said extra time would be granted if it is needed.

"While we are interested in resolving this situation expeditiously, the commission is not interested in forcing a fire sale of this property," she said.