NJ appeals court upholds Tropicana license denial

Atlantic City, New Jersey – A New Jersey appeals court was just as put off by massive layoffs, bug-infested rooms and uncooperative management at the Tropicana Casino and Resort as state regulators were, and upheld the denial of the casino’s license.

Tuesday’s ruling affirmed last December’s decision by the state Casino Control Commission to strip the former owners of the gambling resort of their license and put the property up for sale.

The Tropicana had appealed the decision, claiming the commission acted wrongly and exceeded its authority in denying the casino a new license.

Last December, regulators cited an affiliate of Kentucky-based Columbia Sussex Corp. for laying off nearly 1,000 casino workers, causing problems with cleanliness and service, as well as for poor compliance with state regulations. The appeals court decision reached many of the same conclusions.

„The findings made by the commission that Tropicana lacked financial integrity and responsibility, as well as business ability, are amply supported by the record,“ the judges wrote.

The judges cited „the massive staff layoffs,“ replacement of senior executives with less experienced people, „the cleanliness crisis,“ and „intransigence“ on the part of ownership in complying with important regulations in upholding the commission’s decision.

The property, which includes New Jersey’s largest hotel at 2,129 rooms, is up for sale, but still open. A first round of bids was rejected because they were too low.

Tropicana president Mark Giannantonio is running the day-to-day operations of the casino under the supervision of a state-appointed trustee, retired state Supreme Court Justice Gary Stein. Giannantonio said the ruling will have no effect on the casino’s operations.

„I work for the judge now; we severed ties (with Columbia Sussex) on Dec. 12,“ Giannantonio said. „We’re just trying to do the best we can in a very difficult market.“

Linda Kassekert, chairwoman of the Casino Control Commission, said she was pleased by the decision.

The court ruling allows the thus-far unsuccessful effort to find a new buyer for the Tropicana to continue.

Stein has said it is likely the casino eventually will be sold through a pre-planned filing under Chapter 363 of the U.S. bankruptcy code. It would allow the eventual buyer to obtain clear title to the property, free from any liens or lawsuits, and would be quickly completed, Stein said.