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Nevada Regulators Approves Restructuring Plan for Tropicana Entertainment

On August 21st, 2008, the Nevada Gaming Regulators voted unanimously to approve a restructuring plan for the bankrupt Tropicana Entertainment LLC, which manages eleven casino properties in the United States. The plan approved by the state Gaming Commission places the corporation in the management of a new board and Tropicana chief executive Scott Butera and excludes Tropicana owner William Yung III, who was initially in line for a board seat.

Tropicana Entertainment, an affiliate of Columbia Sussex Corporation had been under his direct management. The changes happened following Tropicana Entertainment's May 2nd, 2008 Chapter 11 bankruptcy filing in Delaware. Butera also said changes to the company's Tropicana hotel and casino on the Las Vegas Strip and other properties would be done in a dignified manner. He added that good employee-management relations are important and a vital factor in the success of the casino in the near future.

Butera reached a tentative agreement on a contract with the influential culinary and bartenders union covering seven hundred fifty Tropicana employees, who have been working on an extended contract since May last year. Commission Head Pete Bernhard said that oversight by the regulators and bankruptcy court will give several layers of control. He also said that the organization's brand new management plans should prevent the loss of important staffers needed to execute those plans. The new managing board of the company is headed by restructuring banker Thomas Benninger.

Other members of the board include Butera, Michael Corrigan and Bradford Smith, a former head of the New Jersey Casino Control Commission. Tropicana Entertainment has been trying to restructuring a part of their $3 billion debt loan, which comes from its $2.1 billion buyout of Aztar Corporation in 2007. Financial problems started after the organization lost their casino license to manage Tropicana Atlantic City and the economy weakened.

As part of their restructuring program, Tropicana Entertainment intends to move their headquarters from Crestview Hills, Ky., to Las Vegas. Besides its Tropicana property on the Las Vegas Strip, the organization's other Nevada properties include the Horizon and MontBleu hotel-casinos on Lake Tahoe's south shore and the River Palms and Tropicana Express resorts in Laughlin, on the Colorado River.


09/17/2008 07:57 PM


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