Secured Parties Seeking Regulatory Approvals From the New Jersey Casino Control Commission to Finalize Sale Closing Expected Before Year-End
Retired Justice Gary S. Stein, the state-appointed trustee and conservator of the Tropicana Atlantic City Casino and Resort (the 'Tropicana'), today announced that the United States Bankruptcy Court in Camden, N.J. has approved the sale of the casino and resort to the Tropicana's pre-petition lenders (the 'Secured Parties') in exchange for the cancellation of $200 million of their secured claims.
The Secured Parties have made a filing with the New Jersey Casino Control Commission that is one of several filings the Secured Parties need to make in order to obtain the different Commission approvals that will allow the Secured Parties to complete the transaction. Among the issues this filing requests is a decision from the Commission as to whether the Secured Parties can own the Tropicana as part of the larger Tropicana Entertainment, Inc. ownership structure, which they will own as a result of the conversion of part of their pre-petition debt into equity in Tropicana Entertainment LLC upon its emergence from separate Chapter 11 proceedings, or whether the Tropicana will be owned by the Secured Parties in a stand-alone ownership structure.
It is expected that the regulatory filings and subsequent rulings will take five or six months to complete. Closing of the sale of the Tropicana will occur after interim casino authorization is granted by the Commission. The transaction is expected to close before year-end.
Justice Stein said: 'The court's approval for the sale of the Tropicana to its Secured Parties is a major step toward the successful completion of this transaction. The court's decision has added a level of certainty to the Tropicana's future and we are grateful for that.'
Mark Giannantonio, President and Chief Operating Officer of the Tropicana, said: 'All of us at the Tropicana look forward to working with our new owners and we are optimistic that the Casino Control Commission will approve their filings as soon as possible. While we await transition to new ownership we fully expect to continue to operate in a smooth and uninterrupted manner and Tropicana customers will continue to receive the highest-quality hotel, entertainment and casino experience.'
On April 29, Tropicana announced that it had filed motions seeking bankruptcy court authorization to conduct a sale of the casino and resort under a 'stalking horse' asset purchase agreement that provided for the Secured Parties, through a newly formed entity, to purchase the Tropicana in exchange for the cancellation of $200 million of their secured claims. The sale was being conducted pursuant to Section 363 of the United States Bankruptcy Code with the objective of selling the Tropicana's assets free and clear of any liens and claims other than certain assumed liabilities. Ordinarily, under the Section 363 sale process, the sale of the Tropicana would have been subject to an auction. Because no additional qualified bids were received, however, Tropicana did not conduct an auction.
The Tropicana is one of the largest casino hotels in Atlantic City with 2,129 rooms and almost 140,000 square feet of gaming space. The complex is situated on approximately 14 acres of land with 220 yards of ocean frontage.
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