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N.J. Casino Control Commission provides a nine-month interim authorization
The state Casino Control Commission Wednesday gave final approval to the sale of the Tropicana Casino Resort to companies controlled by Carl Icahn, a Princeton graduate, and granted interim casino authorization to allow them to takeover ownership and operation of the Atlantic City casino.
"This is a major step in what has been a more lengthy process than any of us could have anticipated," Sharon Anne Harrington, the commission's vice chairwoman, said. "Carl Icahn's return to the business of gaming in New Jersey certainly brings ... signs of rejuvenation and optimism in the market."
Interim casino authorization is essentially a form of temporary qualification that allows Tropicana Atlantic City Corp. to acquire and control the Tropicana casino hotel before a full investigation and hearing into the suitability of the company and its owners. The authorization is for a period of nine months although it can be extended for an additional three months if necessary.
During that period, the state Division of Gaming Enforcement will conduct an intensive investigation into the new owners and report their findings to the commission. The commission will then hold a hearing and decide whether to issue a plenary license.The decision Wednesday comes almost 27-months after the commission refused to renew the Tropicana's casino license in December 2007 because the casino's then-new owners did not qualify to hold a license. That decision triggered a series of events which put the property into the hands of a conservator and started a process for the eventual sale of the casino hotel complex. That sale process was delayed by legal appeals all the way to the state Supreme Court and a deteriorating economy.
"When the commission started the race to find a buyer for Tropicana, we anticipated a sprint; instead, we got a marathon," Harrington said.
In approving a new interim casino authorization, the commission ended the conservatorship that has controlled the casino since December 2007. Former state Supreme Court Justice Gary Stein served as the conservator. To comply with the interim casino authorization provisions, Tropicana Atlantic City Corp. created a new trust and named businessman Harold First to serve as trustee. The commission determined that there was no need to continue the conservatorship.
"Though the road trod was not always smooth, but more often bumpy and sometimes rock strewn, Justice Stein persevered through it all," Harrington said. She said it was difficult to find a willing buyer at a fair price "in the midst of an historic economic meltdown."
The new trustee, First, worked 29 years for the accounting firm of Laventhol and Horwath and has served on 23 corporate boards of directors and chaired a number of independent audit committees of those boards. He was chief financial officer for Icahn Holding Corp. for just over two years between 1990 and 1993. Since then he has served as a financial consultant.
In addition to approving the request for interim casino authorization, the commission approved the financing plan for Tropicana Atlantic City and its new parent company, Tropicana Entertainment Inc. It also approved the independent audit committee for Tropicana Entertainment. The failure of the former owners to comply with the requirement for an independent audit committee was a major factor in the decision to find them unsuitable in 2007 and to not renew the casino's license.
The New Jersey Tropicana Casino & Resort is now an entity owned 46 percent by affiliates of Carl C. Icahn. That approval clears the way for the entire Tropicana organization to emerge from bankruptcy, in a transaction that is expected to be completed early next week. Mr. Icahn said that he was extremely pleased that the Casino Control Commission's approval had been granted and that he wished to thank the New Jersey Casino Control Commission, as well as the Division of Gaming Enforcement, for working so assiduously.
Regarding the Tropicana's New Jersey operation, Mr. Icahn noted that "there will undoubtedly be tough sledding ahead for Atlantic City, especially in light of the increasing competition from neighboring states. However, I believe that Atlantic City, with its beautiful beaches, can again become a premier destination resort. For this to come to fruition, casino hotels must invest capital not only in their own resorts but also in 'major events' that will draw gamblers away from competing states." Mr. Icahn added that because it will emerge with only minimal debt, the Tropicana will not only be able to survive but will be in a position to make the investments necessary to succeed.
Mr. Icahn also expressed his appreciation to the casino commissions and regulators in Indiana, Louisiana, Mississippi and Nevada, in which the Tropicana operates, for all of their hard work in completing the approval process. "I look forward with great optimism to the future of the Tropicana," Mr. Icahn stated.
— TOM HESTER SR., NEWJERSEYNEWSROOM.COM
