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They burned the Monte Carlo ... and may get away with it
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They burned the Monte Carlo ... and may get away with it
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First, a correction: The Tropicana Casinos & Resorts Web site is here, finally up and running after languishing in a half-finished state for an entire year. I don't know why Columbia Sussex has left the Tropicana Entertainment domain name sitting out there vacant (probably something to do with saving money) but that's why you (or rather, I) shouldn't Google "Tropicana Entertainment."
The troll who says that the "Casinos" link "has been off the Columbia Sussex Web site for months," however, is sadly misinformed. (I know, because I accessed it at least as recently as April 11.) Unless 24 days constitutes "months." I was never good at New Math.
Then some good news: Tropicana Entertainment management is promising no (additional) layoffs at the Vegas property, in the wake of the bankruptcy filing, according to a KVBC-TV report this morning. That's another pleasant change from what we've gotten used to since the property changed hands.
On the other hand, staffing has been cut so deeply in certain areas that it's difficult to imagine where they could find room for further reductions. One maid to every hotel floor, maybe?
Aforesaid troll wrote in today mostly to spew ad hominen insults, and ethical and personal slurs, but also to float a few contentions, vis-a-vis the Tropicana bankruptcy. He's thoroughly unpleasant but may have something of value to contribute to the discussion, especially as he seems to be privy to information that hasn't appeared in news coverage of Tropicana. To wit ...
A) "Any conversation with analysts would tell you that [Tropicana Entertainment President Scott] Butera was brought in for this very reason [bankruptcy]. His hiring was, it is widely believed, forced upon [Columbia Sussex CEO William] Yung by the debtors. This is what he does. He is in it for the long haul, as he was with Trump on his financial problems."
(In support of this argument, one could cite the displacement of Yung sidekick Theodore Mitchel with Robert Kocienski, Tropicana Entertainment's new CFO. Whatever the reason, the shift brings a long-overdue infusion of demonstrable casino expertise to Trop HQ.)
B) "Tropicana Entertainment intentionally missed the [Credit Suisse] payment which defaulted the Tropicana here because preparation for the bankruptcy filing was being prepared. CS, as well as all the creditors, have been in continuous contact with Butera."
(I can't wait to find out how Wilmington Trust Corp. feels about that, having been persuaded to give Butera the proverbial 'just a little more time' to work things out. Forbearance ends May 15; Chapter 11 filed May 5. Score: Butera - 1, Wilmington Trust - 0.)
(UPDATE: The forebearance agreement was amended late last week.)
C) "The true value in the Aztar [Corp.] deal was, and still is, the 34 acres on the Strip."
A matter of opinion, Mr. Troll (who labels any view to the contrary as "idiotic"). Analyst estimates placed as much as $985 million to $1 billion-plus worth of the Aztar deal on the Las Vegas Tropicana.
However, as anybody who'd ever read any Aztar financials would know, the Atlantic City Tropicana was basically carrying Aztar, bringing in over half the company's cash flow and revenue (see p. 22): 64% and 58%, respectively, in 3Q06. The LV Trop accounted for 13.5% of EBIDTA and 17% of revenue in that same time frame.
D) "The same would have happened if they lost control of Vegas ... "
Flat wrong. The financial damage caused by subtracting the LV Trop's cash flow wouldn't be chicken feed, but it wouldn't have been the dagger blow to the heart that was the loss of the A.C. Trop (see above). The Vegas site might have a lot of potential value that hasn't been unlocked -- or is being underutilized -- but the Atlantic City property was putting by far the most cash on the table ... a not inconsiderable value when there are interest payments to be met.
Then again, Columbia Sussex might unlock a treasure chest of wealth when Tropicana Entertainment crawls out from beneath the rubble and erects a vast pleasure palace on the Strip. And the cow might jump over the moon, too. But I'm not staying up nights.
Still, perhaps Mr. Troll has a point or two, if his social skills are somewhat lacking. You be the judge.