No new bids submitted for NJ Tropicana casino, but lawyer says late offer may materialize

No new NJ Tropicana bids, but late offer may come

ATLANTIC CITY, N.J. — No new bids for the Tropicana Casino and Resort were submitted by the Friday deadline, but a lawyer involved in the bankruptcy court auction said an after-hours offer from a potential purchaser might still materialize.

It was unclear whether such an offer could be accepted.

Sean Mack, an attorney for the conservator tasked with selling the Tropicana, said no offers beat the 5 p.m. Friday deadline.

“We have been in contact throughout the day with a potential purchaser who did not get their bid in by 5 p.m., but it’s possible they may submit an offer this evening,” he said.

Should such an offer materialize, Mack said, it may have to be presented to the bankruptcy court judge presiding over the Tropicana’s sale.

A group of debt holders including billionaire investor Carl Icahn agreed to act as a so-called “stalking horse” in bankruptcy court. That involves setting a minimum bid that others would have to exceed to obtain the casino.

That group was widely seen as the favorite to win the Tropicana because it has offered $200 million of the debt it bought — at a steep discount — in exchange for the casino. Other purchasers would have to offer more than $200 million in cash or securities.

Under the procedure set out under Section 363 of the federal bankruptcy law, if no additional bids were received by the deadline the debt holders’ group was to get the Tropicana, subject to approval by the bankruptcy judge and the state Casino Control Commission.

Gilbert Brooks, a lawyer for the debt holders, did not immediately return a call seeking comment Friday evening.

The sale became necessary in December 2007 when state regulators stripped the Tropicana’s former owner, an affiliate of Crestview Hills, Ky.-based Columbia Sussex Corp., of its casino license. After buying the Tropicana in January 2007, the company cut nearly 1,000 jobs, leading to problems with cleanliness, service and compliance with state casino regulations.

Interim management has since corrected those problems.

When the casino first hit the market, it was expected to fetch about $1 billion. But the recession sent the price plummeting.