Trop woes continue

Like many a would-be empire-builder, Columbia Sussex met with a serious reverse on its Eastern Front. Having lost its license in New Jersey, the company now has to sell off 3 casinos, and even then might not be in the clear. From the Philly Inquirer:

Add Philadelphia; Baton Rouge, La.; and Las Vegas to the list of places where Columbia-Sussex Corp. – which lost its license to operate the Tropicana Casino & Resort in Atlantic City last week – faces issues ranging from health-code violations to the possible loss of other gaming licenses.

Its casino licenses in Indiana, Louisiana and Nevada appear in jeopardy, while labor demonstrations have been ongoing at its hotel in Baltimore and Tropicana casino in Las Vegas, where members of two unions have been working without a contract for months.

Yesterday, the company – based in Fort Mitchell, Ky. – said it would sell its casinos in Vicksburg, Miss., and Evansville, Ind., to raise money to pay off lenders. The company is also in the midst of trying to find a buyer for the Tropicana in Atlantic City.

In addition, the company faces health-code violations at one of its Philadelphia properties, the Sheraton Philadelphia City Center. City officials said that while the violations found in one of the hotel’s kitchens were officially deemed “critical,” they were not unusual for a large commercial kitchen. Unsanitary conditions at the Atlantic City Tropicana were a factor in the loss of its New Jersey gaming license.

The company announced a plan yesterday to sell some of its properties to pay down debt.

“In short order, we have developed a plan to address challenges by selling our properties in Atlantic City, Evansville and Vicksburg in an orderly manner,” the company said. Cash from the sales will help it pay off some senior debt, according to William J. Yung III, chief executive officer and president of Tropicana Entertainment, the gambling subsidiary of Columbia-Sussex.

The company said last week that it might seek bankruptcy protection if it were unsuccessful in appealing the licensing decision of the New Jersey Casino Control Commission.

Tropicana’s other problems | Philadelphia Inquirer | 12/18/2007

I’m seeing some parallels to Napoleon’s invasion of Russia here–after retreating from the burned-out remnants of Moscow, his army was never the same. Similarly, Columbia-Sussex met defeat at the Trop AC after “winning the battle” by successfully acquiring the property, and is now on a long forced march back, selling off properties just to stay afloat, dogged by accusations of all sorts, and flirting with bankruptcy.

As an Atlantic City native, I feel perverse pride in the fact that my hometown helped to bring down what had been a prosperous, expanding company.

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