Just a few days ago, we reported that both Caesars Entertainment and Tropicana Entertainment were working together to try and purchase, then shut down, the Atlantic Club Casino Hotel in Atlantic City. The bid was for $23.4 million and had to be approved by a federal judge before the exchange could be finalized. On Monday, the U.S. Bankruptcy Court in Camden ruled that the deal was approved and the property deal could move forward.
It was revealed during the court proceedings that another group wanted to purchase the struggling casino and would have paid more than the Caesars/Tropicana price tag. At $24 million, the Sobe Holdings, LLC group of Florida, wanted to purchase the casino and keep it open.
The group would have operated the casino as part of their Deauville Beach Resort property which is located in Miami, Florida. The property would have continued to function as a hotel and not a casino. Attorneys in the case stated that the bid was not accepted for approval as a bank that was involved in the auction questioned if the Sobe group would be able to close the sale.
With the approval ruling, Sobe was in objection with their attorney David Braverman in attendance. Braverman argued that Caesars should be not a qualified bidder as based on financial conditions as well as debt covenants. As for Caesars, the attorney for the company stated they would not dignify the argument with a response.
Braverman asked for the property to be sent for rebid and Chief Justice Gloria Burns did not concede. She stated the concerns of Sobe with Caesars should have been addressed during the auction process. Caesars and Tropicana will now pay the $23.4 million for the casino. Tropicana will earn the slot machines and remaining gaming equipment while Caesars will take hold of the property.
Burns stated that it was not lost on her that people would lose jobs due to the ruling. The 600 employees have a union contract and Burns has ruled they should receive $1,500 in severance pay. Employees will also be able to keep their pension plans but no contributions will be made to the plans.
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