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Hooters Casino Sale Termination Spells Trouble For Owners

155 East Tropicana, an investment and holding company, was forced to terminate the potential sale of the casino to Hedwigs Las Vegas Top Tier.

The ownership of the Hooters Casino Hotel in Las Vegas has found itself in deep financial trouble as a plan to sell the resort has fallen through. 155 East Tropicana, an investment and holding company, was forced to terminate the potential sale of the casino to Hedwigs Las Vegas Top Tier after the purchaser failed to make a $500,000 payment due by a June 6th deadline.

Although Hedwigs' offer was unsolicited, and despite Hedwigs forfeiting a non-refundable $5.5 million in deposits and payments for extensions, East Tropicana still finds itself in an untenable position regarding its debt.

Moody's Investment Service has downgraded Tropicana's corporate rating and the rating on its secured notes, as well as its default probability.

The company defended its viability, stating that cash on hand, along with open lines of credit and future cash flow and payments due will keep the company able to meet debt obligations.

East Tropicana, which has an exclusive licensing agreement with Hooter of America concerning hotels and casinos, had actually seen a recent increase in gambling revenue from the casino, but suffered a 6.4%decline in sales due to plummeting room rentals. The $98 million sale to Hedwigs had appeared a godsend.

Published on June 9, 2008 by PrestonLewis

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Recent Comments

Posted by: PascalWhen: 08/23/2010 09:02:44 PM EST
So did they find a buyer?