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LAS VEGAS-The state Gaming Control Board this week voted unanimously to recommend licensing approval for former MGM Grand executive Alex Yemenidjian to run the Tropicana Hotel Casino, a well-known but distressed resort asset on the Las Vegas Strip that is changing hands as it emerges from Ch. 11 bankruptcy protection. The Nevada Gaming Commission will consider the board’s recommendation for final approval on June 18.

Yemenidjian is part of Toronto-based Onex Corp., Canada’s largest private-equity firm, which will take control of the 1,850-room Tropicana Las Vegas here later this year. After Tropicana Entertainment LLC filed for protection from creditors in May 2008, a special purpose Onex entity acquired more than US$200 million of the principal amount of Tropicana’s $440-million term loan, which is secured by the 34-acre resort. The debt was purchased at various discounts as the first investment by Onex’s third fund.

The plan of reorganization for the resort, which is separate from the company’s other assets, was confirmed in May 2009 and, subject to certain regulatory approvals. The [bankruptcy reorganization] plan provides for the secured creditors, including Onex and the other holders of the $440 million term loan, to receive 100% of the equity in the Las Vegas property. Onex says it expects to be in a position to take control of Tropicana Las Vegas later this year, the company stated.

Last month, Onex said it believes the pro forma company is well positioned for a turnaround and able to withstand the current downturn in the Las Vegas market because it will have no debt, slightly more than $20 million in cash and a working capital facility.

Yemenidjian is credited with stabilizing the MGM Grand for Kirk Kerkorian and, after that, his Metro-Goldwyn-Mayer film studio. A 2001 profile in Forbes magazine refers to Yemenidjian as “the Wizard of MGM.” Among other things he is currently is a director with Kerkorian’s nonprofit Lincy Foundation, which works to improve the lives of people in Armenia. Both Yemenidjian and Kerkorian have Armenian ancestry.

Tropicana is one of the oldest and best-known casino names in Las Vegas, in part due to its location at one of the busiest pedestrian intersections in the world, Las Vegas Boulevard and Tropicana Avenue. The property has approximately 1,850 hotel rooms, a 61,000-square-foot casino, five restaurants, an 850-seat showroom and approximately 1,800 employees. A $100-million renovation is planned after Onex and the other debt holders assume ownership.

Last month the resort had to shut down its 560-room Paradise Tower after an inspection turned up a non-compliance issue related to unpermitted plumbing work performed in during a late 1990s remodeling. The tower remains closed.

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