Tropicana Casino Group Going Bankrupt
Wednesday, May 7th, 2008
The owner of Tropicana Las Vegas Hotel and Casino filed for bankruptcy but promised it will conduct business as usual at all of its gaming and resort properties.
Tropicana Entertainment LLC owns of 13 casinos with 11,000 employees in 5 states including its resort in Las Vegas, blamed its inability to cover its debts on its license problems in New Jersey, Atlantic City.
A significant downturn in tourism, a drop in real estate values and a tightening of the credit market that made acquiring more debt impossible were also cited for the filing Monday.
According to the filing, the company has 3.3 billion dollars in debt and 2.8 billion in assets. It brought in 1.0 billion dollars in revenues last year.
A state judge is overseeing the sale of Tropicana Atlantic City, which must be completed by June 9.
President Scott Butera complained in the filing Monday in US Bankruptcy Court in Delaware that the move is devaluing the assets by forcing a court sale to occur “in an artificially constrained timeframe into the teeth of an extremely inhospitable real estate market.”
Gaming revenues in Atlantic City were down 9.6 percent in 2007 from 2006, the New Jersey Casino Control Commission reported.
The decline came amid a national economic downturn that has reduced the public’s appetite for travel and leisure spending.
The Tropicana in New Jersey isn’t included because it is in state custody and two casinos, the Amelia Belle Casino in Louisiana and the Westin Casaurina in Las Vegas, are owned by a corporate affiliate, Columbia Sussex.
The bankruptcy filing puts the fate of the company’s most valuable asset, the Tropicana Las Vegas, in question.
Land on the Las Vegas Strip in recent years has been sold for as much as 35 million an acre, meaning the real estate holdings alone in Las Vegas could be worth more than one billion.
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