What is going on with Tropicana Casino?
By: admin, Sunday May 25th 2008
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An announcement in May saw a change for Tropicana Casino in Atlantic City. A judge was enlisted to help in the sale of the Tropicana Hotel and Casino in Atlantic City. The request to sell has been in front of the court for several months prior to the May decision that was finally reached. Gary Stein a part of the Supreme Court decided that the changes in the current agreement Tropicana had would affect the sale, so much that they needed to look for new bids.
In fact with the changes seen in Atlantic City in the last few months the owners of the Tropicana may be able to get a higher price. At first the Tropicana was sitting in court because of bankruptcy proceedings and needed to have an immediate sale, which placed some very high demands on the hotel and casino. The investors were pulling out and remodelling was just not an option.
The new management that the casino has been under for the last several months is partly responsible for the increase in the performance. Stein feels that rejecting the current bids on the Tropicana is necessary in order to make a smooth and successful transaction.
At the moment they have bids from Joseph Palladino. The bid is for $950 million. Colony Capital which has the Hilton Casino and Resort have offered $850 million. Cordish is a third company offering a bid, but they have not disclosed the amount publicly at this time.
Part of what has Stein and even the Tropicana owners hoping for better is the sale of the Trump Marina. That sale went through at the beginning of the year to new investors who were only too happy to get the casino. This sale has caused a potential to be seen in the Atlantic City market.
However, the cause of the trouble may not be over yet, so it is a waiting game to see if the Tropicana will get the bid they truly want. The trouble started like everything in the last year, with the credit crunch. The Tropicana was trying to make some very necessary improvements to the overall project and when the bank their loan was with started having issues and the casino losing revenue, it spelled too much trouble for the owners and many investors.
The credit crunch is not yet completely controlled so there could be more issues on the horizon for other Atlantic City casinos as well as getting a satisfactory settlement for the Tropicana. Since the court is behind waiting for new bids everything will be in a holding pattern until something is accepted, at which point more news will be forthcoming.
Atlantic City as a whole has seen a 1.6 percent increase over last year. This increase should help the bids come in a little higher, as the Tropicana was one to see a significant improvement in the last several months. May was especially helpful in the casino industry despite rising gas prices and other economic issues.
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