Fire Sale of Tropicana Casino likely to be blocked
Cordish Company offered $700 million for the Tropicana Casino & Resort in Atlantic City. The bid will be reviewed by the New Jersey Casino Control Commission and a U.S. Bankruptcy Court judge in Delaware.
CEO of Tropicana Entertainment, Scott Butera is not entirely happy with the offer and says that it may be below the value of the casino’s assets. Tropicana Entertainment filed for Chapter 11 bankruptcy in May of this year and have been trying to assume control of the Tropicana Casino. The casino and hotel remained open after the New Jersey commission voted in December 2007 not to renew the Tropicana’s casino license.
Butera has asked that the securities Cordish would be putting up for the purchase be published and assessed. He futher said that Cordish Company saw an opportunity in a depressed market and are looking to take advantage of the situation. He added that with the incorporation of the Tropicana Casino in the Tropicana Entertainment group, the company would be able to stabilize the operation.
The Tropicana Hotel and Casino is one of the largest hotels in New Jersey with 2,100 rooms and 140,000 square feet gaming space. Cordish Company has not commented on the request to have their securities assessed as yet. The downturn in casino industry and also the current economy has been blamed for the “unreasonably low” offers for the casino. Tropicana Entertainment are seeking a higher offer for the property as the debt on the property exceeds the $700 million currently on offer.