After filing for Chapter 11 protection in U.S. Bankruptcy Court in May 2008, Las Vegas-based Tropicana Entertainment LLC announced today that it has submitted a reorganization plan that would allow it to restructure part of its $3 billion debt burden and rebuild around a new, value-conscious entertainment brand.
According to a Disclosure Statement and Plan of Reorganization that were filed in federal bankruptcy court on Sunday, Tropicana says it will reorganize into two new entities: OpCo, which would include 10 casinos and resorts in the existing Tropicana portfolio, including those in Atlantic City, N.J., and Evansville, Ind., and LandCo, which would consist exclusively of Tropicana's trademark Las Vegas casino resort. The reorganized company will convert $2.3 billion in secured OpCo debt into common stock, will cancel unsecured OpCo debt and will convert $442 million in secured LandCo into equity.
In addition, Tropicana said it would retire $67 million that is outstanding under its debtor-in-possession financing agreement and cancel the ownership interests of former Tropicana owner William Yung III, who stepped down as an officer of the company in June.
"The Disclosure Statement and Plan of Reorganization describe nine months of effort to build our management team, infrastructure and capital base so that we can succeed in today's challenging economic environment," Tropicana President and CEO Scott C. Butera said in a statement. "They also reflect active and ongoing negotiations with our creditors and constituents."
According to Butera, the reorganized Tropicana will be more financially viable and over the next five years will focus on growing its revenue base, maintaining its current level of operating expenses and improving its net income. In the same five-year period, the company hopes to generate a projected $275 million worth of capital investments with which to refurbish and revamp its casinos and resorts, which Butera said will be focused going forward on affordable entertainment options.
"As we developed our plan, we had a unique opportunity to examine the new world of gaming and we believe that the company is well positioned to operate in a more cost sensitive, value conscious industry," he said. "Moving forward, we will leverage our brand, our physical assets and our people to provide value-driven entertainment experiences to our customers."