Icahn group appears to be winner of NJ Tropicana

ATLANTIC CITY, N.J. — A group including billionaire investor Carl Icahn appeared to have won the right to buy the Tropicana Casino and Resort at the bargain price of $200 million after no additional bids were submitted by the Friday deadline.

The casino had been expected to fetch nearly $1 billion before the recession sent the price plummeting.

Sean Mack, an attorney for the conservator tasked with selling the Tropicana, said an after-hours offer from a potential purchaser might materialize, but none had been received two hours after the 5 p.m. deadline. It was unclear whether such an offer could be accepted.

Should such an offer materialize, Mack said, it may have to be presented to the bankruptcy court judge presiding over the Tropicana’s sale.

A group of debt holders including Icahn agreed to act as a so-called “stalking horse” in bankruptcy court. That involves setting a minimum bid that others would have to exceed to obtain the casino.

An e-mail to Icahn Enterprises seeking comment was not immediately returned Friday evening.

The debt holder group was widely seen as the favorite to win the Tropicana because it had offered $200 million of the debt it bought — at a steep discount — in exchange for the casino. Other purchasers would have had to offer more than $200 million in cash or securities.

Under the procedure set out under Section 363 of the federal bankruptcy law, if no additional bids were received by the deadline the debt holders’ group was to get the Tropicana, subject to approval by the bankruptcy judge and the state Casino Control Commission.

Gilbert Brooks, a lawyer for the debt holders, did not return a call seeking comment Friday evening.

The low-ball $200 million offer is the kind of bid that has worked before for Icahn in Atlantic City. He bought the former Sands Casino Hotel from bankruptcy for $65 million, then sold it six years later to Pinnacle Entertainment Inc. for $270 million.

Pinnacle imploded the building, but its plans for a $2 billion replacement have stalled.

The Tropicana sale became necessary in December 2007 when state regulators stripped its former owner, an affiliate of Crestview Hills, Ky.-based Columbia Sussex Corp., of its casino license. After buying the Tropicana in January 2007, the company cut nearly 1,000 jobs, leading to problems with cleanliness, service and compliance with state casino regulations.

Interim management has corrected those problems.