Casino Connection Atlantic City

Palladino’s Threatened Pullout

by Casino Connection Staff

As New York investor Joseph Palladino considered withdrawing his $950 million bid for the Tropicana last month, the casino’s state-appointed conservator said Palladino’s investment group hasn’t yet disclosed a financing plan.

Michael Stein, attorney and son of Tropicana conservator Gary Stein, said Palladino promised to come forward with financing, but never did. The other bidders are Planet Hollywood, Cordish Co., and Colony Capital, which owns the Atlantic City Hilton and its sister property, Resorts.

   

Meanwhile, a real estate broker for Palladino said the investor will back out of the process altogether unless the conservator names a price instead of taking competitive bids.

   

“What bidding process doesn’t have a price?” Haberle asked.

   

Stein is the retired New Jersey Supreme Court justice in charge of running Tropicana since it lost its license last December. He is also in charge of the sale, but says the foundering economy, credit crunch and “unreasonably low bids” for Tropicana in the first round have stalled the sale process.

   

Stein now has until October to find a buyer, and has said that a bankruptcy auction might be the best way to increase the offers, resolve numerous legal and financial entanglements hampering the sale, and guarantee that the buyer gets full, undisputed title to Tropicana and its assets. Haberle disputed that notion, saying Tropicana’s value would plummet 30 percent to 40 percent in a bankruptcy sale.

   

Tropicana Entertainment lost operations of two of its three largest casinos last year and faces further scrutiny by Nevada regulators for handing out big executive perks even as the company faltered. A report in the Las Vegas Review Journal cited bonuses from $50,000 to $120,000 for several vice presidents no longer with the company. Theodore Mitchel, former senior vice president and CFO, received a base salary of $212,000 with a bonus of $100,000, even though he worked less than eight months for Tropicana Entertainment.

  

 The company filed for Chapter 11 bankruptcy protection in May.