The uncertainty about Tropicana's intentions comes from itssuccessful alteration of the sale agreement allowing it to opt outof selling to anyone, and without penalty. The original agreementallowed for Tropicana to seek a higher and better offer during aninterim period but did not allow it not to sell, and El Dorado hadthe right to the aforementioned break-up fee if Tropicana choseanother, higher offer.

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"This sale is not a sale," El Dorado proclaimed in itsunsuccessful objection to Tropicana's revised terms, according tocourt documents reviewed by GlobeSt.com. "Tropicana asserts thatits 'proposed procedures will increase the likelihood that Debtorswill receive the greatest possible consideration for the EvansvilleAssets in a sale in the immediate future because they will ensure acompetitive and fair bidding process.' Eldorado believes that theopposite is true. That it may not sell--is likely to deter biddingbecause prospective bidders are unlikely to be willing to expendthe monies necessary to do due diligence, arrange financing andobtain regulatory approval in the absence of an actual intent tosell."

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El Dorado Resorts put $10 million in escrow in March, havingagreed to buy Casino Aztar for approximately $228 million and asmuch as $245 million, depending on the property's performanceduring the first year under the new ownership. Tropicana declaredbankruptcy about two months later, technically allowing the companyto get out of the agreement, which it has done.

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Tropicana filed its motion to re-initiate the sale process onAug. 21 but retained the right to withdraw the motion. El Doradofiled a motion to compel Tropicana to decide whether to moveforward with the original agreement before the existing Sept. 28deadline. The Committee of Senior Secured Lenders created by thebankruptcy court supported the sale but wanted to see if Tropicanawould move forward on its own before supporting a motion to compel.El Dorado's motion was denied concurrent with the judge's approvalof the new sales terms.

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El Dorado wants the sale to go through in part because it hasalready paid hundreds of thousands of dollars to maintain thefinancing commitment it has in place to close on the acquisition.In its motion, El Dorado stated the sale was tentatively agreed toin the first place "to avoid adverse action by the Indiana GamingCommission" and that the deal with the gaming commission required athird party to oversee operation of the casino, which in theorycould choose to sell the asset if the sale is not consummated bySept. 28.

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El Dorado says it has expended $850,000 already to maintain itsacquisition financing commitment, which expires Dec. 28, andexpects to expend an additional $1 million before the deal isdecided one way or the other. It is currently paying $196,000 permonth to maintain the financing. After Sept. 30 that cost willincrease to $244,000 per month, the company said. "The debtors arenot harmed by deciding now whether to proceed with the purchaseagreement whereas continued delay imposes a significant monetarycost on [El Dorado]," the company stated in its unsuccessful motionto compel the sale on the original terms.

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The secured lenders want the asset sold because they believe itwould maximize sales proceeds in support of Tropicana's ultimatereorganization. "The debtors have a financed commitment from ElDorado for the Evansville casino that was negotiated in a bettermarket, without the overhang of these pending Chapter 11 cases,"stated the steering committee. "If the debtors permit the 'bird inthe hand' to escape and then debtors subsequently decide [or arecompelled to] sell Aztar Indiana, there are no assurances that thedebtors would be able to find another bidder willing to pay as muchas El Dorado or that any bidder would be able to find financing, inthis difficult business climate for the gaming industry."

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Tropicana Entertainment LLC and its affiliates own 11properties, nine of which are covered by the bankruptcy filing. Oneof the properties not included is the Atlantic City Tropicana,which the company lost control of as a result of the licensingissue, dealing a critical blow to its cash flow and causing it todefault on debt obligations, which in turn caused it to seekprotection from creditors under US bankruptcy laws. For morebackground, click here.

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