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Carl Icahn's Bid for the Tropicana Casino and Hotel

On May 31st, 2009, Carl Icahn was supposed to be the person that sparked interest in the Tropicana Casino and Resort facility in Atlantic City, New Jersey. He put in what a lot of people believed was going to be the casino bid that led to others but it appear that it did not materialize. The deadline on May 29th, 2009, Friday, came and went and Icahn's bid was still the only one.

Icahn placed in what is referred to as a stalking horse bid for the Tropicana Casino in the bankruptcy court. It is important for the court to begin with this type of bid when trying to sell a casino property. There is a big possibility that a bid could have been place in for the Tropicana Casino after the 5:00 p.m. deadline on Friday but it would be much more complicated for that bid to be approved. If it was placed after the deadline, the bid would have to be approved by the bankruptcy court.

Carl Icahn's bid was well below what the casino could have commanded back before the global financial crisis. It had been rumored that Tropicana could have been sold for $1 billion. Instead, Icahn and his group of gaming partners may steal Tropicana.

Even with the low bidding price, there is no 100% guarantee that Carl Icahn can help Tropicana to survive. Atlantic City casino revenues have fallen into dismal number in the past few months, with casino visitors down as well.

Casino bankruptcy sales are nothing new for Carl Icahn. He has previously bought and turned over the former Sands Casino Hotel. He bought the casino facility for $65 million, then sold it 6 years later to Pinnacle Entertainment for a profit of $205 million.

 

Thursday, June 25 , 2009
Victor Copeland