TROPICANA STAGING A COMEBACK - Author: KatA 

Barring any major disasters, Tropicana Entertainment may become the first gaming company to escape bankruptcy since the recession began. If everything goes according to plan, billionaire financier Carl Icahn will become the largest owner of the company as they restructure their finances and ownership on January 27th. Under the new plan, an Icahn Capital led finance group will provide $150 million in credit to the bankrupt company. $70 million of that will be used for bankruptcy financing and fees leaving $80 as working capital. Tropicana Atlantic City was also purchased by one of Icahn’s investment groups and this property will be brought under the Tropicana Entertainment umbrella. However, the Tropicana on the Vegas strip won’t be brought into the fold. That company is still owned by a separate group of investors led by Canadian private equity firm Onex Corp. and Alex Yemenidjian, former MGM Grand Inc. executive. Before they move forward, Tropicana Entertainment must receive approval from the Nevada Gaming Control Board. However, they received preliminary approval earlier this week, so things are looking good. After the re-structure, Tropicana Entertainment will own nine casinos in states such as Nevada, California and New Jersey. Company representatives have recently been visiting hearings in all states over the purchase. If the plan receives full approval, Icahn will control 47.5 percent of the company’s debt with an additional 150 secured creditors controlling less than 5% each. Under the new structure, three of the company’s seven board seats will go to Icahn and two of his representatives. Also sitting on the board will be former Station Casinos Chief Financial Officer Glen Christenson. Christenson currently sits on the NV Energy and First American Financial boards but says that the prospect of being involved with Icahn on a project is what drew him to the Tropicana’s board. He says that when Icahn’s associates approached him about getting involved he decided to join them because he felt that he could “learn something” from Icahn. Incahn’s involvement in the project will be his first in the casino industry since he sold American Casino & Entertainment Properties in 2008. This investment also involved buying in at a depressed value when the company was having major financial difficulties and then selling at a profit. It looks like Icahn may be on track to repeat history and for the sake of Tropicana Entertainment, I hope he’s just as successful. When he sold in ’08 it was for $1.3 billion.