ATLANTIC CITY, N.J. — Billionaire financier Carl Icahn may be rolling the dice again on an Atlantic City casino.
The former owner of the now-defunct Sands Casino Hotel is among parties who may offer to buy the troubled Tropicana Casino and Resort once it's offered in a bankruptcy auction.
Atlantic City has been struggling not only with the nationwide recession, which leaves gamblers with less money to risk, but also with competition from new slots parlors in Pennsylvania and New York. A casino authority said recently that 10 of Atlantic City's 11 casinos, including the Tropicana and the distressed Resorts Atlantic City, a foreclosure target, were shedding jobs at an alarming pace.
Attorney Gilbert Brooks, representing Icahn and other secured lenders who hold a $1.4 billion mortgage on the Tropicana casino-hotel, says Icahn and others are willing to make an offer as a so-called stalking horse. That involves making a minimum offer in a bankruptcy court auction that other bidders can then exceed; if no one else bids, the stalking horse gets the property.
The state Casino Control Commission, which licenses and regulates the industry, had been expected to authorize a sale Wednesday. But because a potential offer from the lenders appeared close to materializing, the deadline was put off for a month.
A bankruptcy auction likely will be authorized March 18.
The Tropicana has been overseen by a state-appointed conservator since December 2007, when its former owners were stripped of their casino license after nearly 1,000 layoffs led to problems with cleanliness, service and compliance with state gambling regulations.
The conservator, Gary Stein, a retired state Supreme Court justice, had tabbed Baltimore-based Cordish Co. as a potential buyer. But the two sides still haven't reached a deal that would be acceptable to the senior lenders, who could block it in court.
Stein attorney Sean Mack said the company's chairman, David Cordish, remains interested in the Tropicana. Last year, Cordish offered $700 million for it, but that offer has been reduced because of the economic meltdown.
The new amount Cordish is willing to pay for the casino hasn't been disclosed.
A union representing more than 800 Tropicana casino dealers and other workers said resolution of a labor dispute would make the casino "a much more attractive property." The United Auto Workers union filed an unfair labor practices charge Tuesday against Stein, alleging he has failed to bargain in good faith while pursuing a sale.
Stein declined through his attorney to comment on the complaint.
The specter of what cost-cutting management of the Tropicana did to that casino was clearly on the minds of commission members as they heard a request from a lender seeking to foreclose on the Resorts Atlantic City, New Jersey's first casino, which hasn't made loan payments since October.
Column Financial Inc., a commercial mortgage subsidiary of Credit Suisse, asked the commission last month to let it foreclose on the casino. Failing that, Column Financial wants the Colony Capital LLC affiliates that own the casino to hand over title to the property. Column would keep the casino open while searching for someone to run it.
"It's pretty simple," Column lawyer Paul O'Gara said. "Resorts borrowed a lot of money. They stopped paying interest on it."
Resorts co-owner Nicholas L. Ribis acknowledged the casino's 2009 budget doesn't provide for resuming interest payments on its debt. But he said he hopes to reach a deal with Column that would avoid foreclosure.
"We're in the middle of a 1,000-year, once-in-a-lifetime perfect storm, trying to preserve this asset," he said. "It's not a place any of us wants to be."
He said the casino won't file for bankruptcy and expects to return to a positive cash flow this month.
Resorts has $20 million cash on hand and expects that to grow later this year to $30 million, enough to keep it going. It plans to fund a $15 million bank account to ensure it can pay winning bets, employee salaries, taxes and other responsibilities.
The commission plans to vote on Column's Resorts foreclosure request at its March 4 meeting.
Resorts was the first casino outside Las Vegas when it opened in May 1978. But it has an older clientele that spends _ and loses _ less money than younger crowds that prefer newer casinos such as the Borgata Hotel Casino & Spa.
Resorts highlights its retro nightclub, Boogie Nights, where '70s disco music is king, and many of its players are senior citizens who ride buses to gamble for a few hours before returning home.