Icahn Grabs Atlantic City Casino at Garage Sale Price

After several failed attempts to sell the Tropicana Casino in Atlantic City, trustees were forced to accepted a basement-level offer from financier Carl Icahn for the gambling venue.

The strange and twisted journey of the Tropicana Casino in Atlantic City took another unexpected turn today, as a bankruptcy auction found no bidders willing to surpass Carl Icahn's stalking-horse price for the casino. Icahn and his group of investors will be able to assume control of the casino as soon as the new ownership receives a gambling license from New Jersey regulators, said a spokesman for the property's trustee.

Icahn will not even have to pay cash or find financing for his purchase of the casino resort. Instead, the $200 million price will be matched by debt forgiveness by Icahn and his fellow bondholders. The bankruptcy auction was held over the last few weeks, without a superior ofer forthcoming.

“The bid deadline was last Friday and no other bids were received,” trustee attorney Sean Mack told Bloomberg.

Retired state Supreme Court Justice Gary Stein had acted as trustee of the Tropicana since the revocation of licensing to the previous owners by the state Casino Control Commission in December of 2007. Stein had twice operated private auctions to sell the property, but rejected the first batch of offers as too low.

Stein accepted a bid in the second go-round from Cordish Company for $750 million, which he said was reluctantly approved as still less than what he expected. But Cordish withdrew its offer as the recession deepened and Atlantic Ciy gaming revenues plummeted.

Ironically, the bids rejected by Stein as too low would have likely all been significantly higher than the price now being paid by Icahn.