|By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News
March 4, 2009 - ATLANTIC CITY -- The lender for the oldest casino here can begin foreclosure proceedings, but its owner will maintain control over its bank accounts.
That was the position taken today by the New Jersey Casino Control Commission on the fate of Resorts Casino Hotel.
State gaming regulators said the casino's lender, Column Financial Inc., and its loan servicers could not take control of the casino until after the commission determined whether they needed casino licenses, which had been the fundamental issue between the two sides.
"We're very satisfied with the decision," said Gil Brooks, attorney for the owners of Resorts. "The commission did exactly what the law required."
Paul O'Gara, the attorney for Column Financial, Trimont Real Estate Advisors Inc., and other lenders, also claimed victory today.
"We got the right to foreclose, which is what we wanted," O'Gara said. "Now, we will move forward and make decisions as to how we will proceed in a measured fashion."
In a 23-page ruling, commission chairwoman Linda Kassekert acknowledged the plight of Atlantic City's first casino and one of the smallest here, which is clearly struggling amid fierce competition.
She spoke of the need "to explore a satisfactory resolution that would ensure the continued viability of our longest-standing casino licensee, while preserving its loyal workforce of more than 3,000 employees."
Resorts' predicament comes before the five-member board just a little more than a year since the commission stripped a license from the former owner of the Tropicana Atlantic City casino. A state-appointed trustee has since been in charge of the Tropicana and has been seeking a buyer.
In its request to take over the Resorts casino, Column Financial, a wholly owned subsidiary of Credit Suisse, said it wanted to establish a bank account, overseen by loan agent Trimont, as a way to monitor the casino's expenditures and deposits.
Kassekert said today that that request appeared to be more contractual than regulatory and not for the gaming board to determine.
"Thus, I am not prepared to direct Resorts to deposit funds into the property account," she said in the ruling.
Nick Ribis, vice chairman and chief executive officer of Resorts International Holdings L.L.C., which owns Resorts and the Atlantic City Hilton casinos here, breathed a sigh of relief after being told he would maintain control of Resorts, which he referred to in testimony as "his home."
He said he was determined to avoid filing for bankruptcy, and instead to seek a deal with the lenders.
"We are trying to work this out so the operation will continue to move forward at a time when we are in terrible [financial] distress in this world," he said.
The commission ruled that Resorts would be required to maintain a set-aside of $15 million to cover payouts to winning gamblers, payroll, and taxes during this period.
Resorts is among a number of casinos fighting for survival.
The owner of the three Trump casinos recently filed for Chapter 11 bankruptcy, and the New Jersey gaming commission will rule later this month on whether to authorize a bankruptcy auction for the Tropicana.
Contact staff writer Suzette Parmley at 215-854-2594 or firstname.lastname@example.org.
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