Final Judicial Approval Signals the End of the Atlantic Club Casino and Hotel
In Atlantic City, Judge Gloria Burns approved the $23.4m offer by Tropicana Entertainment and Caesars Entertainment to buy the Atlantic Club Casino Hotel. Last minute union objections threatened to derail the process and a rival bidder complained that its bid was rejected.
Sobe Holdings bid $24m, but the bid was rejected as being of higher risk than the one from the Tropicana and Caesars. Lawyers for Sobe objected that Caesars’ debt mountain—$22.1bn according to its latest financials—should be a barrier to the purchase.
The Judge rejected their arguments, stating “at this point, the horse is out of that barn.” She ruled that only arguments about fraud or collusion could be used to contest the bid.
She also rejected the objections of Local 54 of the Unite-HERE union. Workers who will lose their jobs after the sale goes through will receive a severance package of $1500 plus they will keep the pension contributions that have been made to date.
The ruling will see the end of the Atlantic Club. Caesars will close the hotel and casino on January 13 and has no plans to re-open it. The Tropicana will take the table games and slot machines.
Casino Control Commission Chairman Matthew Levinson issued a statement that suggested a silver lining: “No one likes to see a business close, but we are optimistic that market consolidation will result in a stronger and healthier hotel and casino industry in Atlantic City.”