Tropicana Entertainment's new board members received initial regulatory approval Wednesday, even though gaming regulators have not completed their investigations of the new members.
Gaming Control Board Chairman Dennis Neilander said the "unique situation" of the company's ongoing bankruptcy restructuring, which includes removal of embattled hotelier Bill Yung III from the company's daily operations, allows the board to forward its recommendation to approve the changes to the Nevada Gaming Commission.
Yung did not attend the hearing.
The board is recommending that the new directors' approval expire in August 2009, with the provision that Neilander could extend their terms if they have not been granted final approval by then.
The proposal goes before the commission on Aug. 21.
Yung was the sole board member and chief executive officer of the wholly owned company when it ran into regulatory and financial trouble late last year. He stepped down from his CEO duties in June and from the board in July under pressure from the company's bondholders.
Tropicana Entertainment filed Chapter 11 bankruptcy in Delaware in May after the company defaulted on nearly $2.7 billion worth of bonds after losing its license in December to operate the Tropicana Atlantic City, the company's largest revenue and cash flow generator.
A New Jersey appellate court denied an attempt by the restructured company to regain control of the property. The Tropicana Atlantic City is being operated by a trustee while bids are being accepted for its possible sale.
Scott Butera, current chief executive officer, president and director, told regulators in Carson City that Yung has no input in the company's day-to-day operations.
Yung can sit in on the board meetings, but he does not have a vote or any influence on the board's decisions, Butera assured regulators.
The 41-year-old executive told regulators that many of the concerns that regulators in New Jersey expressed about Tropicana Entertainment are being addressed by the changes in the company's structure and the company hopes to regain control of the Tropicana Atlantic City.
Besides the board, the gaming company has been busy building its executive management staff, further separating itself from Columbia Sussex, Yung's Crestview Hills, Ky.-based hotel company.
Gaming Control Board member Randy Sayre said the backgrounds of the four members of the board, which includes a former gaming regulator, pose minimal risk to the daily operations of the company.
The board is led by Chairman Thomas Benninger, a restructuring banker and founding partner of Global Leveraged Capital.
Other board members are Butera, former Metro-Goldwyn-Mayer Studios Chief Financial Officer Michael Corrigan and former New Jersey Casino Control Commission Chairman and CEO Bradford Smith.
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.