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A Real Tropicana Folly

August 22, 2008

 

The Nevada Gaming Commission on Thursday gave unanimous approval for the Columbia Sussex Corporation to hand over operational control of bankrupt Tropicana Entertainment to a four-person board eliminating the owner William Yung III from all operations and ownership status and while the new board members undergo investigation for licensing in Nevada. Chairman of the Nevada Gaming Commission, Pete Bernhard said, “This particular structure at this particular time under these particular circumstances justify us approving (this deal),” “It’s not something we would do with any company at any time that’s in financial distress.”

So, I ask why would you do it at all?  The owner chased after the stock bidding up beyond $50 a share when no fool would have bought it for more than $35 a share, and then leveraged everything, laid off thousands of workers, pissed off the Culinary Union, and then defied the New Jersey Casino Control Commission by not setting up internal audit structuring that is required by New Jersey law. 

All of this stupidity, directed by Mr. Yung himself, fell back into his lap when the Commission declined to give him a permanent license and placed the casino in the hands of a conservator while waiting for bidders.  At this point with the credit crunch they may have a very long wait for someone to want to pony-up 3 billion dollars for someone to buy an aging casino in New Jersey while Pennsylvania is opening up huge gaming halls and cannibalizing New Jersey’s gambling business.

While all this is happening, less than enlightened journalists in Las Vegas are writing articles about how the big bad New Jersey Control Commission is practically communistic in their decision, regardless of the fact that Casinos were created under a referendum in 1978 that included in its charter – one of the purposes for allowance of those casinos – the purpose of the creation of employment for New Jersey residents.  Nevada could care less about that, the employment-at-will laws and the disregard for the working class has long been ingrained in the once small circle of millionaires, and now billion-dollar multi-national corporations with mostly the same management personnel, that rule the roost here.  One particular journalist even stated that if a casino wants to allow it’s toilets to overflow and its rooms to be dirty then that is their choice.  That had to be the stupidest thing I’ve ever seen or heard.  The business of this state reflects the image of this state, whether it is in New Jersey or Nevada, California-if you allow shitty operators to run shitty businesses, then you get a shitty perception of what your state stands for and allows.  Then this guy who actually gets paid to write this crap, states he thinks the Culinary Union is sabotaging the Tropicana and bedbugs were “planted” by those horrible union employees (statements the owner and management originally made).  And you wonder why this guy lost his license there?

So, here in Nevada where the good old boys are still the good old boys, Scott Butera a very good executive that I know from my days at Donald Trump’s Empire in Atlantic City, is placed in charge with this new board that has ex-communicated the owner.  Why is this happening I must ask?  Why is this hotel getting special treatment here in Nevada when it is so upside down, the sale of all the assets could not come near what Yung paid for the Tropicana Corporation.  In this supposed laissez-faire atmosphere here in Nevada (for employees at least) , why are we allowing an inept operator/owner to give up his ownership and control and stand in the corner on “time out” while someone else bails him out for all his stupidity?  Since when have we become a socialistic business state?  Hypocrisy abounds between those that have, and those that have not in the city of Las Vegas and the State of Nevada.  I’m happy those that are still at the Trop here and in AC still have jobs-and each person doing the work of three people – but the reality is they would be better off allowing someone to buy the places for thirty cents on the dollar, knock this one here in Vegas down eventually and make room for a world class resort, something this state should demand of every casino project. 

Scott should know that, Donald paid the bondholders thirty-three cents on the dollar when he went bankrupt back in the nineties in the days of Ivana and Marla and out-of-control Trump Taj Mahal executives that spent his money like sailors on shore leave.  And by the way, he paid that thirty-three cents on the dollar in notes that would convert to stock in 5 years, and I believe over 120 businesses went bankrupt on the deal, some that had been in business for over 30 years.  He forgot to read his own first book “The Art of the Deal” and then Steve Wynn did almost the exact same thing years later allowing a shrewd Kirk Kirkorian to create the comglomerate MGM-Mirage.  Buy low, sell high………you have to sell high to make it work though, not buy high.

There’s no tellin’ what varmints get away with here in the ole’ West……let‘s not even talk about that fancy 10 billion dollar water pipeline that’s gonna suck out the North’s underground water for Vegas yet……………..Whoa Nelly!  Talk to the Knappster! (George Knapp Vegas’ investigative reporter par excellence) He’ll give you an earful on that subject better than I could.

 

-Should have taken a left, what was I thinking?-James Reed (leader of the Donner Party)

 

 

 

 

 

 

 

 

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