1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 08-01-16 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, January 16, 2008 10 Atlantic City Commission Offices 11 Joseph P. Lordi Public Meeting Room - First Floor 12 Tennessee Avenue and Boardwalk 13 Atlantic City, New Jersey 08401 14 10:38 a.m. to 11:38 a.m. 15 16 17 Certified Court Reporter: Darlene Sillitoe 18 - - - - - - - - - - - - - - - - - - - - - - - - - - - 19 20 ATLANTIC CITY COURT REPORTING, LLC 21 CERTIFIED COURT REPORTERS AND VIDEOGRAPHERS 22 1125 ATLANTIC AVENUE, SUITE 416 23 ATLANTIC CITY, NEW JERSEY 08401 24 (609) 345-8448 www.accourtreporting.com 25 2 1 B E F O R E : 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 WILLIAM T. SOMMELING, VICE CHAIR MICHAEL A. FEDORKO, COMMISSIONER 4 MICHAEL C. EPPS, COMMISSIONER RALPH G. FRULIO, COMMISSIONER 5 6 PRESENT FOR THE CASINO CONTROL COMMISSION: DARYL W. NANCE, ADMINISTRATIVE ANALYST 7 DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 8 OFFICE OF THE GENERAL COUNSEL: DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE 9 SECRETARY LEONARD J. DIGIACOMO, ASSISTANT GENERAL COUNSEL 10 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 11 DENIS CORBETT, SENIOR COUNSEL TERESA M. NAGENGAST, SENIOR COUNSEL 12 BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR CLAIRE FRANK, PROGRAM SUPERVISOR/SENIOR EEO 13 COORDINATOR 14 DIVISION OF GAMING ENFORCEMENT: 15 DEPUTY ATTORNEYS GENERAL JACK ADAMS, DEPUTY ATTORNEY GENERAL 16 BRIAN BISCIEGLIA, DEPUTY ATTORNEY GENERAL JAMES FOGARTY, DEPUTY ATTORNEY GENERAL 17 FREDERICK J. McDONOUGH, DEPUTY ATTORNEY GENERAL R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 4 DENIS CORBETT, COUNSEL R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL 3 LORETTA I. PICKUS, ESQ. FOR: TRUMP TAJ MAHAL ASSOCIATES 4 ITEM NO. 6 TERESA M. NAGENGAST, SENIOR COUNSEL 5 FREDERICK J. McDONOUGH, DEPUTY ATTORNEY GENERAL 6 MARIE JONES, ESQ. FOR: SHUFFLE MASTER, INC. 7 ITEM NO. 7 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 8 JACK ADAMS, DEPUTY ATTORNEY GENERAL STERNS & WEINROTH 9 PAUL M. O'GARA, ESQ. FOR: APOLLO HAMLET HOLDINGS, ET AL 10 ITEM NO. 8 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 11 JACK ADAMS, DEPUTY ATTORNEY GENERAL STERNS & WEINROTH 12 PAUL M. O'GARA, ESQ. FOR: APOLLO HAMLET HOLDINGS, ET AL 13 14 ITEM NO. 9 CLAIRE FRANK, PROGRAM MANAGER JAMES FOGARTY, DEPUTY ATTORNEY GENERAL 15 LORETTA I. PICKUS, ESQ. FOR: TRUMP ENTERTAINMENT RESORTS, INC. 16 ITEM NO. 10 CLAIRE FRANK, PROGRAM MANAGER 17 JAMES FOGARTY, DEPUTY ATTORNEY GENERAL NICHOLAS CASIELLO, ESQ. 18 FOR: MAC Corp. 19 ITEM NO. 12 LEONARD J. DIGIACOMO, ASSISTANT GENERAL COUNSEL 20 FREDERICK J. McDONOUGH, DEPUTY ATTORNEY GENERAL 21 PASHMAN STEIN, PC SEAN MACK, ESQ. 22 GARY S. STEIN, ESQ. FOR: ADAMAR OF NEW JERSEY, INC. 23 DEBEVOISE & PLIMPTON MICHAEL BLAIR, ESQ. 24 25 4 1 AGENDA PUBLIC MEETING NO. 08-01-16 2 JANUARY 16, 2008, 10:38 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of January 8 9 2, 2008, Public Meeting and Special 4 Meeting minutes of December 19, 2007 2 Applications for employee and casino 5 service industry licenses: 5 applications for initial and/or 9 9 6 renewal of casino key and casino employee licenses 5 applications for initial and/or 9 10 7 renewal of casino key and casino employee licenses Application of Automated Currency 8 Instruments, Inc., pursuant to NJSA 5:12-92(a), and the qualification of Ronald Hicks 9 3 Stipulations of settlement and consent Agreements: 10 a) Suzette M. Dessoye (07-0014-EA) 11 13 b) John F. Hannon, Jr. (07-0529-EA) 11 13 11 c) Helen Nguyen (a/k/a Tran Tat Chau, 11 13 Helen Tat) (06-0639-EA) 12 d) Kevin D. Dang (07-0194-EA) 11 13 e) Mark Avant (07-0135-EA) 11 13 13 f) Miguel M. Batista (07-0399-EA) 11 13 g) Lisa Ramos (a/k/a Alisa Ramos) 11 13 14 (07-0481-EA) h) Robert Almeida, Jr. (07-0425-ER) 11 13 15 i) Luis C. Espinal-Zuleta (07-0519-ER) 11 13 4 Stipulation of settlement in State v. 13 15 16 Trump Taj Mahal Associates 5 Petitions for early reapplication: 17 a) Samuel A. Holt (07-0671-RA) 15 18 b) Bano Khalid (07-0664-RA) 19 21 18 6 Petition of Shuffle Master, Inc., for 19 21 waiver of qualification requirement of 19 Private Capital Management, LP (PRN 2290703) 7 In the matter of a second amendment to 21 33 20 the petition of Apollo Hamlet Holdings, et al., for interim casino authorization 21 and plenary qualification as holding companies of New Jersey casino licensees 33 50 22 8 Amended petition of Apollo Hamlet Holdings, et al., for relief from a certain provision 23 of Casino Control Commission Resolution No. 07-10-17-17 (PRN 3470701) 24 9 Consideration of the qualification of 51 53 Ivanka Trump to serve as a member of the 25 Board of Directors of Trump Entertainment Resorts, Inc. 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 08-01-16 2 JANUARY 16, 2008, 10:38 a.m. ITEM PAGE VOTE 3 10 Petition of MAC Corp. requesting 53 56 4 permission of Kenneth Rosevear to perform the duties and exercise the powers of President 5 of MAC Corp., a holding company of casino Licensee Marina District Development Company, 6 LLC, pending plenary qualification (PRN 3610707) 11 Proposed readoption of Chapter 55 Casino 56 57 7 Simulcasting 12 Consideration of the application of the 57 81 8 Conservator and Trustee for former casino Licensee Adamar of New Jersey, Inc., 9 a) to retain financial advisors, special counsel, and other advisors for the sale 10 of the property; and b) to hire or to ratify the hiring of certain 11 officials and/or consultants for the former casino licensee and other matters 12 Kenneth Shea, sworn 61 PUBLIC PARTICIPATION 13 MERCEDA GOODING 82 14 15 16 17 18 19 20 21 22 23 24 25 6 1 E X H I B I T S : 2 ITEM NO. 2 DESCRIPTION EVD 3 4 EL-1 Remand for hearings 5 license X applications 5 EL-2 Grant 5 licenses X 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Exhibits retained by Commission.) 7 1 (Publlic Meeting 08-01-16 was commenced 2 at 10:38 a.m.) 3 MR. NANCE: I'd like to read an opening 4 statement: 5 This is to advise the general public 6 that in compliance with Chapter 231 of the 7 Public Laws of 1975 entitled the "Open Public 8 Meetings Act," the New Jersey Casino Control 9 Commission on October 17th, 2007, filed with 10 the Secretary of State at the State House in 11 Trenton an annual meeting schedule. On October 12 17th, copies were mailed to subscribers. 13 Members of the press will be permitted 14 to take photographs, and we would ask that this 15 be done in a manner which is not disruptive or 16 distracting to the Commission. 17 The use of cellular telephones in the 18 public meeting room while the Commission is in 19 session is prohibited. 20 Any members of the public who wish to 21 address the Commission will be given the 22 opportunity to do so before the Commission 23 adjourns for the day. 24 Please stand for the Pledge of 25 Allegiance. 8 ITEM NO. 2 1 (The flag salute was recited.) 2 CHAIR KASSEKERT: Good morning. 3 MR. NANCE: Good morning. 4 The matters discussed in closed session 5 were: Enterprise -- were employee and 6 enterprise license matters. 7 The Commissioners approved the January 8 2nd, 2008, closed session minutes. 9 Litigation update regarding: Warren 10 Lackland and Lewis M. Springer, Jr., versus the 11 State of New Jersey and the Casino Control 12 Commission; 13 Gloria Ford versus the State of New 14 Jersey and the Casino Control Commission, et 15 al.; 16 Husain versus the Casino Control 17 Commission, et al.; 18 In the matter of petition of SD from 19 removal of voluntary self-exclusion list; 20 And the petition of Tropicana, et al., 21 for renewal of its casino license. 22 Item No. 1, ratification of the minutes 23 of January 2nd, 2008, public meeting and 24 special meeting minutes of December 19, 2007. 25 VICE CHAIR SOMMELING: Move to approve. 9 ITEM NO. 2 1 COMMISSIONER FEDORKO: Second. 2 CHAIR KASSEKERT: The motion has been 3 made and seconded. All in favor? 4 (Ayes.) 5 CHAIR KASSEKERT: Opposed? 6 (No response.) 7 CHAIR KASSEKERT: Motion carries. 8 MR. NANCE: Item No. 2, applications for 9 employee and casino service industry licenses. 10 This agenda item will be entered as Exhibit 11 List 1 and 2. 12 Exhibit List 1 consists of five 13 applications for initial and/or renewal of 14 casino key and casino employee licenses. 15 The Division has objected to licensure. 16 COMMISSIONER FRULIO: Motion to remand 17 for hearings. 18 COMMISSIONER FEDORKO: Second. 19 CHAIR KASSEKERT: The motion has been 20 made and seconded. All in favor? 21 (Ayes.) 22 CHAIR KASSEKERT: Opposed? 23 (No response.) 24 CHAIR KASSEKERT: Motion carries. 25 MR. NANCE: Exhibit List 2 consists of 10 ITEM NO. 2 1 five applications for initial and/or renewal of 2 casino key and casino employee licenses. 3 Staff and the Division have recommended 4 that these licenses be granted. 5 COMMISSIONER FRULIO: Motion to grant 6 applications. 7 COMMISSIONER FEDORKO: Second. 8 CHAIR KASSEKERT: The motion has been 9 made and seconded. All in favor? 10 (Ayes.) 11 CHAIR KASSEKERT: Opposed? 12 (No response.) 13 CHAIR KASSEKERT: Motion carries. 14 MR. NANCE: For consideration is the 15 gaming related casino service industry license 16 application of Automated Currency Instruments, 17 Inc., pursuant to NJSA 5:12-92(a). 18 The Division has objected to the license 19 application of Automated Currency Instruments, 20 Inc., and the qualification of Ronald Hicks. 21 COMMISSIONER FRULIO: Motion to remand 22 for hearings. 23 COMMISSIONER FEDORKO: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 11 ITEM NO. 3 1 (Ayes.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: Motion carries. 5 MR. NANCE: Item No. 3, stipulation of 6 settlement and consent agreements. When I call 7 your name, please come forward, stand behind 8 this middle table, spreading across the room so 9 that you may be seen: Suzette Dessoye, John 10 Hannon, Jr., Helen Nguyen, Kevin Dang, Mark 11 Avant, Miguel Batista, Lisa Ramos, Robert 12 Almeida, Jr., and Luis Zuleta. 13 Mr. Ingis? 14 MR. INGIS: Good morning, Madame Chair, 15 Commissioners. 16 At this time the staff has nothing to 17 add. 18 CHAIR KASSEKERT: Thank you. Let me ask 19 first that you each state your name for the 20 record, starting with you, ma'am. 21 MS. DESSOYE: Suzette Dessoye. 22 MR. DANG: Kevin Dang. 23 MS. NGUYEN: Helen Nguyen. 24 MR. BATISTA: Miguel Batista. 25 MR. ALMEIDA: Robert Almeida 12 ITEM NO. 3 1 MR. EPSINAL-ZULETA: Luis 2 Espinal-Zuleta. 3 CHAIR KASSEKERT: Okay. In a moment 4 we're going to vote on the stipulations that 5 you've agreed to with the Division of Gaming 6 Enforcement. 7 I'm going to ask at this point if any of 8 you wish to be heard on your matter. You don't 9 need to say anything if you don't want to. 10 Does anyone wish to be heard? 11 (No response.) 12 CHAIR KASSEKERT: I'm taking that as a 13 no? 14 Very good. 15 Mr. Biscieglia? Mr. McDonough? 16 MR. BISCIEGLIA: Thank you, Chair. In 17 regards to B through I, the Division has no -- 18 nothing further to add and ask that the 19 stipulations be adopted as submitted. Thank 20 you. 21 CHAIR KASSEKERT: Thank you. 22 Mr. McDonough? 23 MR. McDONOUGH: And ask you for the same 24 on Item A. 25 CHAIR KASSEKERT: On Item A. Very good. 13 ITEM NO. 4 1 Any questions? 2 VICE CHAIR SOMMELING: Madame Chair, I 3 move to approve the stipulations. 4 COMMISSIONER FEDORKO: Second. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: Motion carries. 11 Thank you for coming. Good luck. 12 FROM THE FLOOR: Thank you. 13 MR. NANCE: Item No. 4, stipulation of 14 settlement in State versus Trump Taj Mahal 15 Associates. 16 Mr. Corbett? 17 MR. CORBETT: Good morning, Chair, 18 Commissioners. 19 In the stipulation of settlement in this 20 case the casino licensee admits to regulatory 21 violation regarding underage gambling and 22 agrees to a penalty of $50,000. 23 Mr. Stebbins is here for the Division 24 and Miss Pickus for the casino licensee. 25 CHAIR KASSEKERT: Thank you. 14 ITEM NO. 4 1 Good morning, Mr. Stebbins. 2 MR. STEBBINS: Good morning, Chair 3 Kassekert, and members of the Commission. 4 You have before you a stipulation of 5 settlement which is very straightforward. I 6 think it covers all of the ground, provides all 7 the information necessary for you to reach a 8 final conclusion on this, and I would occurring 9 to you adopt stipulation. 10 Thank you. 11 CHAIR KASSEKERT: Thank you. 12 Miss Pickus, good morning. 13 MS. PICKUS: Thank you, Chair and 14 Commissioners. 15 I also would request that you approve 16 this stipulation. It was hard fought and 17 negotiated, and it's appropriate. 18 Thank you. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 VICE CHAIR SOMMELING: No questions, 22 Madame Chair. 23 COMMISSIONER FEDORKO: Motion to approve 24 the stipulation of settlement and impose a 25 civil penalty of $50,000 against Trump Taj 15 ITEM NO. 5 1 Mahal Associates for violation of Commission 2 regulations regarding underaged gambling. 3 COMMISSIONER FRULIO: Second. 4 CHAIR KASSEKERT: The motion has been 5 made and seconded. All in favor? 6 (Ayes.) 7 CHAIR KASSEKERT: Opposed? 8 (No response.) 9 CHAIR KASSEKERT: Motion carries. 10 Thank you. 11 MR. STEBBINS: Thank you, Chair. 12 MR. NANCE: Item No. 5, petitions for 13 early reapplication for Samuel Holt and Bano 14 Khalid. 15 Miss Frigen? 16 MS. FRIGEN: Good morning, Madame Chair 17 and Commissioners. 18 Mr. Holt is present. I'd ask him to 19 take a seat at the table here. 20 I would note for the Commission that Mr. 21 Holt did this morning provide the updated 22 documentation that the staff had requested. 23 For your consideration is his petition 24 seeking permission to reapply early for a 25 license for registration and/or a noncredential 16 ITEM NO. 5 1 hotel employment. 2 The Division has interposed no action to 3 this petition. The staff has recommended that 4 if the petition is granted by the Commission 5 that Mr. Holt be required to sign two back-up 6 wage executions addressing two financial debts. 7 CHAIR KASSEKERT: Thank you. 8 Mr. Holt, is there anything you'd like 9 to say today? 10 MR. HOLT: No, ma'am. 11 CHAIR KASSEKERT: Okay. 12 Mr. Biscieglia? 13 MR. BISCIEGLIA: Thank you, Chair. 14 The Commission has the Division's letter 15 of November 29, 2007, in which we interpose no 16 objections to this petition. The Division does 17 agree to execute the wage executions as Miss 18 Frigen has just stated. 19 Thank you. 20 CHAIR KASSEKERT: Thank you. 21 Any questions? 22 VICE CHAIR SOMMELING: No questions, 23 Madame Chair. 24 COMMISSIONER EPPS: Madame Chair, I move 25 to grant Mr. Holt's petition to reapply early 17 ITEM NO. 5 1 for a casino employee license, a casino service 2 employee registration and/or to work as a 3 noncredential hotel employee, conditioned upon 4 his signing two wage execution consent 5 agreements. 6 VICE CHAIR SOMMELING: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: Motion carries. 13 Thank you for coming. Good luck. 14 MS. FRIGEN: Mr. Holt, if you could have 15 a seat, I'll be with you in a couple minutes. 16 The next case we have is Bano Khalid. 17 Miss Khalid is also present. 18 Would you please have a seat? 19 This is the third time that the 20 Commission has seen Miss Khalid. You have 21 previously granted her permission to obtain a 22 preliminary noncredential and reapply early for 23 a registration. This petition is requesting 24 permission to reapply early for a license. 25 And, again, the Division has interposed 18 ITEM NO. 5 1 no objection. 2 CHAIR KASSEKERT: Good morning, Miss 3 Khalid. Is there anything you'd like to say 4 this morning? 5 MS. KHALID: No, thank you. 6 CHAIR KASSEKERT: Thank you. Okay. 7 Mr. Biscieglia? 8 MR. BISCIEGLIA: Chair, once again, the 9 Commission has the Division's letter of October 10 23rd, 2007, in which we interpose no objection 11 to this petition. 12 Thank you. 13 CHAIR KASSEKERT: Thank you. 14 Any questions? 15 VICE CHAIR SOMMELING: No questions, 16 Madame Chair. 17 COMMISSIONER EPPS: Madame Chair, I move 18 to grant Miss Khalid's permission to reapply 19 early for a casino employee license. 20 VICE CHAIR SOMMELING: Second. 21 CHAIR KASSEKERT: The motion has been 22 made and seconded. All in favor? 23 (Ayes.) 24 CHAIR KASSEKERT: Opposed? 25 (No response.) 19 ITEM NO. 6 1 CHAIR KASSEKERT: Motion carries. 2 Thank you for coming. Good luck. 3 MS. KHALID: Thank you. Thank you very 4 much. 5 MR. NANCE: Item No. 6, petition of 6 Shuffle Master, Inc., for waiver of 7 qualification requirement of Private Capital 8 Management, Limited Partnership. 9 Miss Nagengast? 10 MS. NAGENGAST: Good morning, Chair, and 11 Commissioners. 12 For your consideration this morning is a 13 petition filed on behalf of Shuffle Master 14 seeking a waiver of the qualification 15 requirements of Private Capital Management, LP, 16 on the basis that they are an institutional 17 investor. 18 Marie Jones is here on behalf of the 19 Petitioner, and Rick McDonough on behalf of the 20 Division. 21 CHAIR KASSEKERT: Thank you. 22 Good morning, Miss Jones. 23 MS. JONES: Good morning, Chair, 24 Commissioners. 25 I'm here behalf of Shuffle Master. You 20 ITEM NO. 6 1 have the petition of Shuffle Master for waiver 2 of Private Capital. They are an investment 3 advisor registered under the Investment 4 Advisors Act and fit within the definition of a 5 institutional investor. They hold 12.6 percent 6 of Shuffle Master. They have shown good cause 7 for this waiver, as they have signed the 8 passive investors certification. And they -- 9 this is a very small investment for them. They 10 have $23 billion under management right now. 11 I'd be happy to address any questions 12 you may have. 13 CHAIR KASSEKERT: Thank you. 14 Any questions? 15 VICE CHAIR SOMMELING: No questions, 16 Madame Chair. 17 CHAIR KASSEKERT: Mr. McDonough? 18 MR. McDONOUGH: I agree. 19 (Laughter.) 20 CHAIR KASSEKERT: Short and sweet. 21 Thank you. 22 Any questions for Mr. McDonough? Anyone 23 like him to be expand upon his remarks? 24 VICE CHAIR SOMMELING: No questions, 25 Madame Chair. 21 ITEM NO. 7 1 CHAIR KASSEKERT: Is there a motion? 2 COMMISSIONER FRULIO: Move to grant the 3 petition of Shuffle Master, Inc., and waive the 4 qualification of Private Capital Management, 5 LP, pursuant to NJAC 19:51-1.14(b)(3) and NJSA 6 5:12-85(f) based on its status as an 7 institutional investor as defined by NJSA 8 5:12-27.1. 9 COMMISSIONER FEDORKO: Second. 10 CHAIR KASSEKERT: The motion has been 11 made and seconded. All in favor? 12 (Ayes.) 13 CHAIR KASSEKERT: Opposed? 14 (No response.) 15 CHAIR KASSEKERT: Motion carries. 16 MR. McDONOUGH: Thank you. 17 MS. JONES: Thank you. 18 MR. McDONOUGH: Nice job. 19 MR. NANCE: Item No. 7, in the matter of 20 second amendment to the petition of Apollo 21 Hamlet Holdings, et al, for interim casino 22 authorization and plenary qualification as 23 holding companies of a New Jersey casino 24 licensee. 25 Miss Wozniak? 22 ITEM NO. 7 1 MS. WOZNIAK: Good morning, Chair, 2 Commissioners. 3 Mr. O'Gara is here on behalf of the 4 Petitioners and Mr. Adams on behalf of the 5 Division. 6 And I have circulated a draft 7 resolution. 8 CHAIR KASSEKERT: Thank you. 9 Good morning, Mr. O'Gara. 10 MR. O'GARA: Good morning. 11 This is the first of two petitions that 12 you are considering serially, and this petition 13 is for a modification of certain terms of the 14 financing which you approved in the overall 15 approval of the acquisition of Harrah's 16 Entertainment by Hamlet. 17 First answer to the obvious question, 18 the transaction is going to close to January 19 the 28th. Parenthetically, there are minor 20 changes that are also going to occur to the 21 equity structure of this transaction, and I 22 have a petition which has been filed and which 23 Miss Wozniak informs me will be on the agenda 24 for the 30th, which will deal post-closing with 25 those changes in the equity structure. 23 ITEM NO. 7 1 Essentially, so that there's no 2 misunderstanding, they do not in any way affect 3 who's investing in this transaction. What they 4 do is create additional blockers inside of the 5 fund structure as opposed to the co-invest 6 structure to allow additional funding from 7 existing limited partners in the funds. And I 8 think it's -- Jack can correct me if I'm 9 wrong -- three -- a $300 million. 10 MR. ADAMS: Yes. 11 MR. O'GARA: Which is not on the 12 co-invest side. You have $6 billion here, and 13 we're talking about 300 million on 6 billion 14 which is, in our view, not material. But it, 15 in fact, is going to come through those 16 structures, but we have to have those blockers 17 approved. 18 We can close the transaction without 19 that, using available capital and simply then 20 feed the capital from these limited partners 21 back into AGT post-closing a couple of days. 22 And I wanted to explain it, because the debt 23 structure changes are different from the equity 24 structure changes. And assuming your approval 25 of what we have here today, we would close the 24 ITEM NO. 7 1 28th, then have an approval on the 30th, and 2 then close that second little piece of the 3 equity piece. 4 With respect to the changes in the debt 5 structure today, essentially the CMBS financing 6 was of a magnitude in excess of $7 billion. 7 Proposed -- lenders have proposed that be 8 reduced by $750 million to $6.5 billion. The 9 CMBS would then close with the two Atlantic 10 City properties as collateral inside of it. 11 We propose at a point going forward, 12 probably in three or four months, to remove an 13 Atlantic City property from the CMBS structure 14 and to substitute Paris Las Vegas. It can't be 15 done immediately because Paris Las Vegas is a 16 co-licensee with Bally's in something called 17 ParBal. Paris has to be separated out and 18 separately licensed, which takes about 90 days, 19 in fact. 20 Assuming that would happen, we would 21 have the six and a half billion dollar CMBS, 22 which is secured by the four or five properties 23 involved. We would take out AC Showboat. AC 24 Showboat would then be reconstituted from a 25 PROPCO and OPTCO into a single entity. That 25 ITEM NO. 7 1 would then move over into the standard 2 collateral package which secures the remainder 3 of the financing. The only AC property inside 4 of the CMBS would be Harrah's. But we will 5 close with AC Showboat in it. 6 Additionally, we would -- as the 7 original loan documents permitted, the 750 8 coming out will move over on to the nonCMBS 9 financing, and we've alternatively asked that 10 it be in addition to the notes or a separate 11 issue of unsecured debt that would be issued by 12 AGT or HOC. The reason for the alternative 13 approval is, as they sell the debt, it's the 14 appropriate mix when you put that much into the 15 market. About, in any case, that additional 16 debt will be secured by the remaining 17 collateral package, which is the 46 or so 18 casinos owned by Harrah's Entertainment that 19 are not in the CMBS. 20 There are minor changes inside the 21 interest component of this. They are to kind 22 of equalize what was the agreed-upon bargain. 23 At the time there was a spread between LIBOR 24 and the interest that will be paid here. LIBOR 25 has dropped substantially, perhaps more than a 26 ITEM NO. 7 1 point. There will be a half point adjustment 2 on the spread, but I think, as Mr. Adams and 3 the Division has indicated in a report, it's 4 not material. In fact, the overall debt 5 service here winds up being less. 6 Additionally, there's two facilities 7 that are not being included in. That cash is 8 not necessary to the closing. In fact, if you 9 balance that out against the actual cash 10 realization from the insurance proceeds in the 11 Gulf, that money equalizes so you wind up with 12 the same amount of money at the time of 13 closing. 14 And, finally, we're asking approval for 15 a guarantee of the lease payments by the OPTCOs 16 from AGI. I think you call it AGI. We call it 17 AGT. That would guarantee those payments would 18 be made. In other words, Harrah's 19 Entertainment will guarantee that Marina 20 Associates will make the payment to Marina 21 Associates OPTCO. 22 I believe that's the nature of it all. 23 If you have any questions, I'll be glad to try 24 to answer them. 25 CHAIR KASSEKERT: Thank you. 27 ITEM NO. 7 1 Let me ask if there are any questions of 2 Mr. O'Gara before we turn to Mr. Adams. 3 VICE CHAIR SOMMELING: No questions, 4 Madame Chair. 5 CHAIR KASSEKERT: Mr. Adams? 6 MR. ADAMS: Madame Chair, Commissioners, 7 you have our letter in response to this 8 petition. We don't oppose any of the relief 9 that's requested. And, obviously, it does 10 relate to the next matter that you're going to 11 be considering. 12 If you have any questions, I'll be happy 13 to answer them. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 VICE CHAIR SOMMELING: No questions, 17 Madame Chair. 18 COMMISSIONER EPPS: I do. 19 CHAIR KASSEKERT: Sure. Commissioners 20 Epps. 21 COMMISSIONER EPPS: I do have a 22 question, Mr. O'Gara. 23 And it's just my understanding, there's 24 alternative proposals with the 750 million? 25 MR. O'GARA: Yes. 28 ITEM NO. 7 1 COMMISSIONER EPPS: If the 750 moves to 2 the senior notes -- 3 MR. O'GARA: Uh-huh. 4 COMMISSIONER EPPS: It goes at 750. 5 MR. O'GARA: Yes. 6 COMMISSIONER EPPS: If they choose to 7 place it on the -- there's another option where 8 it would take the 250 and put it on the secured 9 debt. 10 MR. O'GARA: Yes. 11 COMMISSIONER EPPS: What happened to the 12 other five? 13 MR. O'GARA: It just becomes an 14 unsecured issue, secured by either HOC or AGT. 15 COMMISSIONER EPPS: Okay. So -- 16 MR. O'GARA: What we have, Commissioner, 17 is a series of options that, essentially what's 18 happening is a separation out of CMBS funded 19 debt. As I understand it, the -- two markets 20 out there, CMBS and conventional debt. They 21 reduce the CMBS. And the commitment letter to 22 the debt originally only proposes to take up to 23 750 or a billion from CMBS and move it to the 24 other side. They've made the decision to do 25 that. It will now go over. The question as to 29 ITEM NO. 7 1 where specifically it goes is determined by the 2 people who are marketing this debt. In other 3 words, how much appetite there is in the 4 market. This is, as you may have gathered, a 5 fairly substantial debt issue which is coming 6 into the marketplace. 7 COMMISSIONER EPPS: And I think I'm 8 pretty clear with that, believe it or not. The 9 only issue that I hadn't been able to follow 10 in -- in -- I look -- I did a little chart for 11 myself and everything -- is I don't know where 12 to put the other five, even in the 13 hypothetical. 14 MR. O'GARA: Oh, it will be a new -- it 15 will just be a AGT or HOC issue of unsecured 16 debt. It would be like an IOU from 17 Commissioners Epps to me. I don't have your 18 house or anything. It will just be out there, 19 you know, and you'll have to pay it. 20 COMMISSIONER EPPS: Okay. It just 21 didn't -- 22 MR. O'GARA: Whether it's an HOC or AGT, 23 I cannot tell you. Or both. But it will be 24 one of the two. 25 COMMISSIONER EPPS: I just didn't see it 30 ITEM NO. 7 1 anywhere. The 500 went away, and I couldn't 2 figure out -- 3 MR. O'GARA: There an overall reduction 4 in the borrowings here. 5 COMMISSIONER EPPS: No. I understand 6 that. 7 MR. O'GARA: You're talking about 500 8 from if they used 250 -- 9 COMMISSIONER EPPS: Yeah. They use 250. 10 MR. O'GARA: It would be the AGT 11 unsecured. 12 COMMISSIONER EPPS: So it would 13 unsecured. 14 MR. O'GARA: Yeah. 15 COMMISSIONER EPPS: So the 250 is secure 16 and five is an unsecured issue. 17 MR. O'GARA: What I will propose to you, 18 post-closing, you'll have it all trued it up 19 for you. You take a look at your debt chart, 20 we'll true it up for you as to how it actually 21 came in and where it went. 22 COMMISSIONER EPPS: Okay. And the other 23 issue is, you were able to secure a reduction 24 of sorts because LIBOR went down, so they 25 renegotiated the margin and that will -- 31 ITEM NO. 7 1 MR. O'GARA: I think it's the other way, 2 but that's okay. 3 COMMISSIONER EPPS: Well, you upped the 4 margin. 5 MR. O'GARA: Yeah. We upped the spread. 6 Because what happened was, I believe that you 7 can fairly conclude that as they discussed some 8 of the changes in the funding of the debt, the 9 lenders talked about these spreads and their 10 willingness to make the changes was, to some 11 degree, driven by the fact that they had 12 bargained to make X on this, and with the drop 13 in LIBOR, they were making X minus one. And 14 now with -- you see the increase in the spread, 15 maybe they wind up making X minus .5 to .6. 16 COMMISSIONER EPPS: Is there any risk 17 that LIBOR moved again the other day and that 18 changes the spread. 19 MR. O'GARA: There's a risk all the time 20 that LIBOR moves. It's the London Interbank 21 Offered Rate. It moves every day. 22 COMMISSIONER EPPS: Exactly, what 23 happens in LIBOR moves, and the spread goes the 24 other way? 25 MR. O'GARA: Well, theoretically, the 32 ITEM NO. 7 1 debt to cost increases, but that's not unique 2 to this transaction. That's the old American 3 economy. 4 COMMISSIONER EPPS: So there wouldn't be 5 a revisit of this for -- 6 MR. O'GARA: Well, there's certain 7 triggers. There's caps. In other words, 8 within the credit agreement, there's a stop 9 point. In other words, if LIBOR went to -- 10 what is LIBOR now? Three. No. One -- let's 11 say -- LIBOR is very low. I didn't look it 12 this morning. But, you know, it can't go to 28 13 percent and then have the whole thing collapse. 14 There's a cap on the maximum interest inside of 15 the credit agreement. 16 COMMISSIONER EPPS: Okay. 17 MR. O'GARA: And I think when we did the 18 models, it was modeled with all that in it. 19 Yeah. But at present it was either fortuitous 20 or, you know, just a function of the world 21 economy that LIBOR did actually drop a point in 22 between the time of the commitment and the 23 closing. 24 COMMISSIONER EPPS: Okay. 25 CHAIR KASSEKERT: Any other questions? 33 ITEM NO. 8 1 VICE CHAIR SOMMELING: No other 2 questions, Madame Chair. 3 CHAIR KASSEKERT: Motion? 4 COMMISSIONER FEDORKO: Motion to adopt 5 the draft resolution and approve the 6 modifications to the debt transactions as 7 described in the record in accordance with NJAC 8 19:43-2.4 and 2.8. 9 COMMISSIONER FRULIO: Second. 10 CHAIR KASSEKERT: Motion is made and 11 seconded. This is a roll call vote. 12 MR. NANCE: Commissioner Frulio? 13 COMMISSIONER FRULIO: Yes. 14 MR. NANCE: Commissioner Fedorko? 15 COMMISSIONER FEDORKO: Yes. 16 MR. NANCE: Commissioner Epps? 17 COMMISSIONER EPPS: Yes. 18 MR. NANCE: Vice Chair Sommeling? 19 VICE CHAIR SOMMELING: Yes. 20 MR. NANCE: Chair Kassekert? 21 CHAIR KASSEKERT: Yes. 22 MR. NANCE: The record will reflect that 23 the motion is unanimous. 24 Item No. 8, amended petition of Apollo 25 Hamlet Holdings, et al., for relief from a 34 ITEM NO. 8 1 certain provision of Casino Control Commission 2 Resolution No. 07-10-17-17. 3 Miss Wozniak? 4 MS. WOZNIAK: Commissioners, again, Mr. 5 O'Gara for the Petitioners, Mr. Adams for the 6 Division. 7 And I have circulated a draft 8 resolution. 9 CHAIR KASSEKERT: Thank you. 10 Mr. O'Gara? 11 MR. O'GARA: The bank's counsel is here. 12 I invite him to join us for questions to the 13 bank. 14 (Laughter.) 15 UNIDENTIFIED PERSON: Very good. Thanks 16 a lot. 17 MR. O'GARA: Because I've spent a lot of 18 time being with lenders, and I always like to 19 have a lender with me. 20 This relief is sought with respect to 21 things which were included in the omnibus 22 resolution which approved the transaction. And 23 at that time you made certain findings with 24 respect to our CMBS financing, which are they 25 are specific to this CMBS financing. And I 35 ITEM NO. 8 1 would suggest to you that both this CMBS 2 financing and this nonCMBS or conventional debt 3 financing is unique and unique to any financing 4 you've ever seen before you before. 5 And what we're seeking here is certain 6 clarification relief with respect to those folk 7 who buy into this debt and who is a financial 8 source and who isn't for purposes of financial 9 source qualification. 10 And we visited this once before with 11 respect to the fact that on the equity side the 12 Commission found that the limited partners who, 13 as you recall, are the people who have a 14 beneficial equity interest without any voting 15 rights or control rights were financial 16 sources. And after examining their 17 relationship, number one, to the transaction, 18 and, number two, more specifically their 19 relationship to the New Jersey properties, you 20 established a threshold on the equity side of 21 people who below that threshold really had no 22 effect, impact, or direct connection that you 23 could -- you know, it's so attenuated that you 24 could attribute to them with respect to 25 financial source qualification. 36 ITEM NO. 8 1 That same issue rises now on the debt 2 side, and we ask you to address it. There are 3 two things which I think are worthy of mention. 4 Number one, on the CMBS side, you'll have $6 5 billion worth of financing here. Six and a 6 half. And the financing, when it is done and 7 completed in the second stage, will be secured 8 by four big casino properties and some other -- 9 a law firm property, a golf course, some 10 undeveloped land, and a piece of land in Macau. 11 And that means that of the collateral of those 12 lenders you are looking to, you know, 25 13 percent of it, maximum, has any relationship to 14 New Jersey. And, in fact, they are attenuated 15 further by the fact that they have no direct 16 lien with respect to anything in the operation 17 side. They are literally lenders into a PROPCO 18 which has a CSI, which has a truly -- which you 19 permitted to be only guaranteed as to the 20 direct lease obligation by the parent not 21 directly by the licensee. And so that 22 relationship is different than a lot of other 23 lenders that you look at as financial sources. 24 Additionally, the magnitude of this is 25 fairly large. It's $6 billion. 37 ITEM NO. 8 1 Now, we know that under your existing 2 ruling that, to the degree that it is 3 collateralized, that is that it's securitized, 4 it's dropped into a trust, and those trust 5 certificates are issued, that those trust 6 certificates aren't, in fact, related or 7 securities of the casino licensee and would not 8 be subject to financial source qualification 9 requirement. 10 The reality that is each of us reads the 11 newspaper every day and knows that the 12 securitization of this, at least immediately, 13 is not a certain thing. That the bank will 14 lend this money. It will be able to securitize 15 perhaps a portion, perhaps a large portion, 16 perhaps a lot of it. No one knows. I mean, no 17 one knows at this point in time what the 18 appetite is, SIBs to take CDOs and whether or 19 not they can take anything. So the loan could 20 wind up sitting there and be -- and the pieces, 21 particularly, can be, you know, conventionally 22 parceled out or participated, or however you 23 want to look at it. 24 And what we're suggesting to you is that 25 because of the attenuated relationship with the 38 ITEM NO. 8 1 licensee, because of the, you know, 25 percent 2 of the total collateral package piece 3 associated with anything licensed in New Jersey 4 that there's some holding level below which the 5 people's relationship is insufficient for them 6 to be a financial source. At least they don't 7 have that connection to effect a New Jersey 8 property. 9 And Mr. Adams has written more 10 exclusively than I have about this and done an 11 analysis and looked at it in which you pick 12 percentages. And I would suggest to you, 13 although you may want to take a lower 14 percentage -- that you -- you take ten percent 15 of total debt, which is 600, assume none of it 16 is collaterized. Assume nothing goes into a 17 CDO immediately. $600 million. That, in fact, 18 $600 million against six billion secured by 19 assets, 75 to 80 percent of which have nothing 20 to do with New Jersey, is not an unreasonable 21 amount to say, hold it. That's a threshold at 22 which you're not really connected sufficiently. 23 And I think that's what we're saying to you. 24 We're saying the same thing on the other 25 side with respect to the other debt because we 39 ITEM NO. 8 1 know that the piece which is the notes are 2 notes which are going to -- they're going to 3 trade in the portal market. They're going to 4 be registered, and they'll be governed by all 5 of your regulations that deal with publicly 6 traded notes and publicly registered notes. 7 But we still have seven billion plus out there 8 that's going to be term debt. And that term 9 debt is going to go to a bank group of -- all 10 of them are in the credit agreement. And 11 they're not going to hold that. They're going 12 to parcel that out. That's too much, you know, 13 for any bank to hold. And when they do, we're 14 looking at the people who have those slices and 15 those pieces of it. And at what point do they 16 have a relationship with a New Jersey casino 17 licensee that's sufficient to bring them within 18 your ambit? 19 And here I think you have a really 20 unique circumstance. Because with the CMBS, I 21 told you the denominator was four. With these 22 the denominator is 46 or 48. So if you had a 23 company which has one casino in Atlantic City, 24 and it has a hundred million dollars' worth of 25 debt, you try to figure out what the 40 ITEM NO. 8 1 relationship is. It's less than equity. It's 2 not a direct relationship. But dollar for 3 dollar, their recourse is to that asset. So if 4 they had recourse, you know, it would be back 5 to the one asset in the pool. Here, whatever 6 it is, it's one-forty-sixth or 7 one-forty-seventh of it is to these properties. 8 So four would be one-twelfth. I mean, it's -- 9 really the spread of the collateral here is so 10 huge that most of the collateral, indeed, you 11 know, 80, 90 percent of the collateral in terms 12 of count -- and you can do an evaluation and 13 come up with different numbers -- is outside of 14 this regulatory ambit. So their relationship 15 to it is a bit different than it is in most 16 circumstances if you look at it because of the 17 breadth of the company and the breadth of the 18 assets. 19 And I believe -- and I think that Mr. 20 Adams again has written, and I think that he 21 would not disagree with the statement -- that 22 this is a loan which is going to be parceled 23 out into an immense number of pieces. One 24 can't speculate, but if it takes four or five, 25 600 pieces to do a billion-dollar loan, this is 41 ITEM NO. 8 1 seven. So we're talking 2800 possibly holders 2 of this thing if it were divided up equally 3 into fairly good size slices. And what we 4 suggest is, for the same reasons and that same 5 kind of a analysis, which is pretty unique to a 6 company which has 50 casinos, that you can do 7 an examination of what the relationship is to 8 the New Jersey -- and whether it's sufficient, 9 sufficient nexus that they come within the 10 ambit and they are financial sources. Below 11 that particular point, you can find there is 12 not the nexus. 13 And the final thing I'd like to address 14 in that -- but there's always a question about, 15 well, who are these folks, you know, who buy 16 all this debt? And the people who participate 17 in these debt trading markets participate in 18 them in the United States. So the trading 19 platform maintained by the banks or that are 20 maintained by companies that function like 21 banks, and they are all subject to the 22 anti-money laundry provisions of the Patriot 23 Act. 24 And I think -- and I would hope -- that 25 in the stroll we kind of took through private 42 ITEM NO. 8 1 equity earlier, you got some idea of what the 2 scrutiny levels are that when you play in that 3 particular ball field and on the equity side, 4 you had the benefit of seeing the kind of 5 documents people sign to buy this -- make these 6 private equity investments, and the kind of 7 representations they made and the kind of 8 representations and information that were 9 furnished by the foreign vehicles which 10 invested over here with respect American tax 11 matters to American banking matters. And, 12 likewise, these are, you know -- these are 13 friendly, wily banks that are doing these 14 trading, and they have the same requirements as 15 these people. So it's not so much that it's 16 unknown or unregulated Wild West. It's real, 17 live trading that's regulated by federal 18 statutes. And the question is that level of 19 connection to New Jersey and whether or not it 20 falls under it. And we suggest that it does. 21 And, again, I would suggest to you that 22 Mr. Adams, again, did another analysis and did 23 the math in his report. And if you look at it, 24 it's pretty compelling. I mean, it sounds like 25 a lot. But when you -- but when you break it 43 ITEM NO. 8 1 down, it really isn't that much as compared to 2 the overall package in the overall, you know, 3 function that you have with respect to this 4 state. 5 So I'd ask that you grant the relief. 6 I'd be real happy to see it, you know, in 7 double digits. That's my dream. You know, 8 everybody has a dream. That's mine. 9 (Laughter.) 10 MR. O'GARA: But if you have any 11 questions, I'd be glad to try to address them. 12 CHAIR KASSEKERT: Let me ask if anyone 13 has any questions of Mr. O'Gara. 14 VICE CHAIR SOMMELING: I just have one. 15 CHAIR KASSEKERT: Sure, Commissioner 16 Sommeling. 17 VICE CHAIR SOMMELING: Paul, in 18 reference to investors, there is absolutely no 19 investors outside of the United States? They 20 are all within the United States? 21 MR. O'GARA: No. They all come through 22 the United States. There's a lot of investors 23 from outside the United States. 24 VICE CHAIR SOMMELING: Okay. 25 MR. O'GARA: You know, it's, you know 44 ITEM NO. 8 1 who your equity investors are. You know -- you 2 know, that ten percent of at least one of them 3 comes from a place far, far away where there's 4 oil. 5 (Laughter.) 6 COMMISSIONER FEDORKO: Texas, you mean; 7 right? 8 (Laughter.) 9 MR. O'GARA: Yeah. Well, a climate 10 similar to Texas. Probably buildings are a 11 little bit different. 12 But, no. There are a whole range of 13 investors. And I think that you have the 14 benefit not only of what you have seen in this 15 transaction but, you know, you've seen -- 16 nobody's first rodeo here. We've all seen 17 syndicated loans and know who buys them. And 18 they are, in fact, high net-worth institutions 19 or individuals. And, you know, they have 20 names. And they'll be something you'll look 21 at, and turn out it will be a charitable trust 22 controlled by Gates family or that family or 23 that family. But you have to qualify to buy 24 into this market. When you're in this market, 25 you know, this is American debt trading on an 45 ITEM NO. 8 1 American platform. And this Patriot Act has 2 quite a reach, and these people have that 3 information, and they have it with respect to 4 everyone. 5 It's just that because it's spread so 6 wide, once you look at that and say, okay. 7 There's -- you know, this isn't like going on 8 in a pit somewhere over there somewhere where 9 the oil is. It's what's their relationship to 10 the New Jersey assets here? And how attenuated 11 is it? You start to say, hold it. Forty-two 12 of the collateralized and the buildings that 13 serve the collateral aren't even within our 14 regulatory ambit. So when you look at the 15 overall amount of debt, and you say, you know, 16 I've got a twelfth of it, it's reasonable to 17 say below a certain threshold it just isn't 18 enough contact for me to say that they fall 19 within that category. And it doesn't mean you 20 don't know anything about them. The general 21 resolution provides that everybody has to be 22 given to you and, if there's something that 23 disturbs you or the Commission, you can pick 24 one out and bring them forward. That's not an 25 issue. 46 ITEM NO. 8 1 VICE CHAIR SOMMELING: Thank you. 2 CHAIR KASSEKERT: Any other questions? 3 I'm glad you keep using the words 4 "threshold" and not "rule." 5 (Laughter.) 6 MR. O'GARA: My mother didn't raise a 7 whole lot of kids. 8 (Laughter.) 9 MR. ADAMS: Chair, Commissioners. I 10 don't have a whole lot to add because I think a 11 lot of the arguments that were in our letter 12 report have already been proffered to you in 13 one way or another. I just want to make a 14 couple of comments. 15 Number one is that we're talking about 16 this case. We're talking about this 17 transaction. We're talking about these four 18 casino properties that are involved in it. 19 That's not to say we may have a totally 20 different viewpoint in another given case. But 21 this certainly has been a unique case in one 22 respect because of that. Because of the nature 23 and size of it, number one. And the various 24 other properties that are involved in this 25 transaction. Because a lot of what Mr. O'Gara 47 ITEM NO. 8 1 says makes sense in that these people that are 2 going to invest in this, they're not just 3 investing because of Atlantic City. 4 CHAIR KASSEKERT: Uh-hum. 5 MR. ADAMS: They're looking elsewhere. 6 And that's a big consideration for us because 7 we're tough here in New Jersey. We want to 8 know who people are, and we want to qualify 9 these people if they have to be qualified as 10 financial sources. 11 But sometimes you have to look at the 12 whole -- the whole picture here. And when you 13 do that -- which is what we attempted to do in 14 our report to you -- there is sort of a point 15 that you get to where it just almost is mind 16 boggling to think in terms of every single 17 person that might put a dollar into this as a 18 debtor -- or as a creditor, excuse me -- would 19 have to qualify for New Jersey purposes. 20 Now, having said that, they're still 21 within our reach. If we need to reach these 22 people in some fashion, we're going to do it. 23 If that were to present itself in some way. 24 But our analysis leads us to believe that on 25 the debt side now we're comfortable with the 48 ITEM NO. 8 1 proposals that we made to you in our report. 2 We don't think it's unreasonable to view it the 3 way we did, the percentages we proffered to 4 you, and so we would be comfortable if -- for 5 this transaction -- if it were five percent. 6 If you want to say it's two percent, that's 7 fine. But our analysis indicates there is a 8 little bit more room here that we have with 9 respect to these debt people, and it's within 10 your sound discretion to -- to -- 11 CHAIR KASSEKERT: But not double digit. 12 MR. ADAMS: Correct. 13 (Laughter). 14 MR. ADAMS: So having said that, if you 15 have any questions, I'd be happy to answer 16 them. 17 CHAIR KASSEKERT: Thank you. 18 Any questions for Mr. Adams? 19 VICE CHAIR SOMMELING: No questions, 20 Madame Chair. 21 CHAIR KASSEKERT: No? Okay. 22 But I'm going to just agree with Mr. 23 Adams in some respects and put a couple remarks 24 on the record. 25 Today we are asked to reexamine our 49 ITEM NO. 8 1 recent rulings as to the qualification of debt 2 holders acquiring an interest through 3 syndication by the initial lenders, each of 4 which is an exempt bank. 5 Qualification is mandated by Section 6 84(b) of the Act for those providing financing 7 "which bears any relation to the casino 8 proposal." The Commission has been and will 9 continue to be extremely circumspect in fixing 10 the scope of financial source qualification. 11 Nevertheless, the Harrah's acquisition 12 by the Apollo and TPG entities is atypical in 13 the magnitude of the financing, the number of 14 casino properties involved, and the structuring 15 of the credit facilities. In the particular 16 facts and circumstances presented here, I am 17 satisfied that some relief may be granted. Not 18 five percent. 19 (Laughter.) 20 CHAIR KASSEKERT: I caution, however, 21 that this is a very limited ruling and is not 22 intended nor should it be interpreted to 23 establish a new rule for Section 84(b) 24 qualification beyond its application in this 25 matter. 50 ITEM NO. 8 1 So, accordingly, I move to adopt the 2 draft resolution and find that, A, the holdings 3 of less than two percent of the term loan or 4 real estate facility as defined in the 5 resolution do not in the circumstances set 6 forth in the record bear a relation to the 7 casino licensees under NJSA 5:12-84(b); and, B, 8 therefore, such lenders will not be required to 9 qualify as financial sources strictly to the 10 extent set forth in the findings and the 11 rulings and subject to the conditions set forth 12 in the resolution. 13 And I so move. 14 Is there a second? 15 VICE CHAIR SOMMELING: Second. 16 COMMISSIONER FRULIO: Second. 17 COMMISSIONER FEDORKO: Second. 18 CHAIR KASSEKERT: Motion has been made 19 and seconded. This is a roll call vote. 20 MR. NANCE: Commissioner Frulio? 21 COMMISSIONER FRULIO: Yes. 22 MR. NANCE: Commissioner Fedorko? 23 COMMISSIONER FEDORKO: Yes. 24 MR. NANCE: Commissioner Epps? 25 COMMISSIONER EPPS: Yes. 51 ITEM NO. 9 1 MR. NANCE: Vice Chair Sommeling? 2 VICE CHAIR SOMMELING: Yes. 3 MR. NANCE: Chair Kassekert? 4 CHAIR KASSEKERT: Yes. 5 MR. NANCE: The record will reflect that 6 the motion is unanimous. 7 CHAIR KASSEKERT: Thank you. 8 MR. O'GARA: Thank you. A man has to 9 dream. 10 CHAIR KASSEKERT: I don't know about 11 your dreams, Mr. O'Gara. 12 (Laughter.) 13 MR. NANCE: Item No. 9, consideration of 14 the qualification of Ivanka Trump to serve as a 15 member of the Board of Directors of Trump 16 Entertainment Resorts, Inc. 17 Miss Frank? 18 MS. FRANK: Good morning, Chair, and 19 Commissioners. 20 Ivanka Trump received temporary 21 qualification from the Commission in July of 22 2007. A draft resolution on her plenary 23 qualification has been circulated to the 24 parties. 25 Miss Pickus is here for Trump 52 ITEM NO. 9 1 Entertainment Resorts and Mr. Fogarty for the 2 Division. 3 CHAIR KASSEKERT: Miss Pickus? 4 There was a stirring out there. 5 Everybody was looking for her. 6 MS. PICKUS: Oh, I'm so sorry to 7 disappoint. 8 (Laughter.) 9 MS. PICKUS: I've reviewed the draft 10 resolution and ask that you adopt it. 11 If not, I don't know how I'm going to go 12 back to the office. 13 (Laughter.) 14 MS. PICKUS: Thank you. 15 CHAIR KASSEKERT: Thank you. 16 Mr. Fogarty? 17 MR. FOGARTY: Hello. Good morning. 18 We've reported favorably on Ms. Trump. 19 We recommend that you qualify her for the 20 position of a member of the Board of Directors 21 of Trump Entertainment. 22 I've seen Claire's draft resolution. We 23 have no objection to its entry. 24 CHAIR KASSEKERT: Thank you. 25 Any questions? 53 ITEM NO. 10 1 VICE CHAIR SOMMELING: Madame Chair, 2 move to adopt the draft resolution to find 3 Ivanka Trump qualified to serve as a member of 4 the Board of Directors with Trump Entertainment 5 Associates, Incorporated. 6 COMMISSIONER FEDORKO: Second. 7 CHAIR KASSEKERT: Motion is made and 8 second. This is a roll call vote. 9 MR. NANCE: Commissioner Frulio? 10 COMMISSIONER FRULIO: Yes. 11 MR. NANCE: Commissioner Fedorko? 12 COMMISSIONER FEDORKO: Yes. 13 MR. NANCE: Commissioner Epps? 14 COMMISSIONER EPPS: Yes. 15 MR. NANCE: Vice Chair Sommeling? 16 VICE CHAIR SOMMELING: Yes. 17 MR. NANCE: Chair Kassekert? 18 CHAIR KASSEKERT: Yes. 19 MR. NANCE: The record will reflect that 20 the motion is unanimous. 21 CHAIR KASSEKERT: Thank you. 22 MR. NANCE: Item No. 10, petition of 23 MAC, Corp., requesting permission for Kenneth 24 Rosevear to perform the duties and exercise the 25 powers of president of MAC, Corp., a holding 54 ITEM NO. 10 1 company of casino licensee, Marina District 2 Development Company, LLC, pending plenary 3 qualification. 4 Miss Frank? 5 MS. FRANK: A draft resolution on Mr. 6 Rosevear's temporary qualification has been 7 distributed to the parties. 8 Mr. Casiello is here for MAC Corp. and 9 Mr. Fogarty for the Division. 10 CHAIR KASSEKERT: Thank you. 11 Good morning, Mr. Casiello? 12 MR. CASIELLO: Good morning, Madame 13 Chair and commissioners. 14 I only want two percent of Mr. Rosevear 15 to be qualified. Okay? 16 Mr. Rosevear has -- would like to serve 17 as President of MAC Corporation. MAC is a 18 subsidiary of MGM MIRAGE. It is also a holding 19 company of Borgata. MAC owns 72 acres of 20 vacant land next to Borgata, which MAC intends 21 to develop into a casino hotel facility. Mr. 22 Rosevear is in charge of that development; 23 therefore, it's appropriate for him to be 24 placed in the position of president of MAC, 25 Corp. 55 ITEM NO. 10 1 We've reviewed the form and substance of 2 the draft resolution, and it is acceptable to 3 us. 4 CHAIR KASSEKERT: Thank you. 5 Mr. Fogarty? 6 MR. FOGARTY: Yes. We reported that we 7 have no objection to Mr. Rosevear being 8 temporarily permitted to operate in this 9 capacity for MAC, Corp., and we have no 10 objection to the entry of the draft resolution. 11 CHAIR KASSEKERT: Thank you. 12 Any questions for the parties? 13 VICE CHAIR SOMMELING: No questions, 14 Madame Chair. 15 COMMISSIONER FRULIO: Move to adopt the 16 draft resolution and authorize Kenneth Rosevear 17 on a temporary basis prior to his plenary 18 qualification to assume the duties and exercise 19 the powers of President of MAC Corporation 20 subject to the conditions contained in NJAC 21 19:43-2.7 which, among other things, require 22 that he file a personal history disclosure 23 form-MJ and NJ supplement by January 31st, 24 2008. 25 COMMISSIONER FEDORKO: Second. 56 ITEM NO. 11 1 CHAIR KASSEKERT: Motion is made and 2 seconded. This is a roll call vote. 3 MR. NANCE: Commissioner Frulio? 4 COMMISSIONER FRULIO: Yes. 5 MR. NANCE: Commissioner Fedorko? 6 COMMISSIONER FEDORKO: Yes. 7 MR. NANCE: Commissioner Epps? 8 COMMISSIONER EPPS: Yes. 9 MR. NANCE: Vice Chair Sommeling? 10 VICE CHAIR SOMMELING: Yes. 11 MR. NANCE: Chair Kassekert? 12 CHAIR KASSEKERT: Yes. 13 MR. NANCE: The record will reflect that 14 the motion is unanimous. 15 CHAIR KASSEKERT: Thank you. 16 MR. CASIELLO: Thank you. 17 MR. NANCE: Item No. 11, proposed 18 readoption of Chapter 55, casino simulcasting. 19 Miss Frank? 20 MS. FRANK: Chapter 55, casino 21 simulcasting, is scheduled to expire on March 22 13th of this year. Upon filing a notice of 23 proposed readoption with OAL, the expiration 24 date will be extended six months to September 25 of this year. 57 ITEM NO. 12 1 The rules on casino simulcasting are 2 before you today for approval and for initial 3 publication in the New Jersey Register. 4 CHAIR KASSEKERT: Thank you. 5 Any questions for Miss Frank? 6 VICE CHAIR SOMMELING: Move to readopt 7 for publication without amendment. 8 COMMISSIONER FEDORKO: Second. 9 CHAIR KASSEKERT: The motion has been 10 made and seconded. All in favor? 11 (Ayes.) 12 CHAIR KASSEKERT: Opposed? 13 (No response.) 14 CHAIR KASSEKERT: The motion carries. 15 We're going to take a brief ten-minute 16 recess? About that. 17 MS. FAUNTLEROY: No more than. 18 CHAIR KASSEKERT: No more than. 19 Very good. Thank you. 20 (A recess was taken from 11:19 to 11:30 21 a.m.) 22 CHAIR KASSEKERT: Thank you. 23 We'll go back on the record. 24 MR. NANCE: Item No. 12, consideration 25 of the application of the conservator and 58 ITEM NO. 12 1 trustee for former casino licensee, Adamar of 2 New Jersey, Inc., A, to retain financial 3 advisors, special counsel, and other advisors 4 for the sale of the property; and to hire or to 5 ratify the hiring of certain officials and/or 6 consultants for the former casino licensee and 7 other matters. 8 Mr. DiGiacomo? 9 MR. DiGIACOMO: Chair, Commissioners, 10 good morning. 11 I believe Sean Mack for the Conservator 12 and the Trustee. Rick -- Richard [sic] 13 McDonough for the Division of Gaming 14 Enforcement. 15 I've shared with counsel a draft of the 16 proposed order in this matter. I believe that 17 they are prepared to consent to its form and 18 entry. The order reflects, and I've confirmed 19 with the Commission's Director of the Division 20 of Licensing that the consultants referred to 21 in the order have each completed the non -- the 22 gaming related CSI license application. 23 CHAIR KASSEKERT: Thank you. 24 Good morning. Again, Justice, Mr. Mack. 25 MR. STEIN: Good morning. 59 ITEM NO. 12 1 MR. MACK: Good morning, Chair. Good 2 morning, Commissioners. 3 We have reviewed the proposed draft 4 resolution, and we have -- we consent to it. 5 And just we ask the Commission to approve the 6 retention the law firm of Debevosie & Plimpton 7 and the investment banking firm of Bear Stearns 8 to assist in the Conservator in the sale of the 9 Tropicana, its assets or stock. 10 With us is Michael Blair from Debevoise 11 & Plimpton firm, and Kenneth Shea and Charles 12 Edelman from Bear Stearns. If the Chair or the 13 Commissioners have any questions of either of 14 them, they are available to take your 15 questions. 16 We'd also ask the Commission to approve 17 the retention of Pamela Popielarski, Gary 18 Simpson, Michael Brown as financial management 19 and operational consultants for the Conservator 20 during this process. And Mr. Simpson is here 21 with us today. Miss Popielarski is here with 22 us today. And Mr. Brown is here. And if there 23 are any questions, they are available for any 24 questions. 25 CHAIR KASSEKERT: Thank you. 60 ITEM NO. 12 1 Let me -- Mr. McDonough, you want to 2 present, and then we'll open it up to questions 3 from the Commissioners? 4 MR. McDONOUGH: Yes, thank you, Chair. 5 I've had the opportunity to review the 6 draft order. It is acceptable to the Division. 7 And the Division does consent, first, to the 8 issuance of the transactional waivers that are 9 before you. And, secondly, we consent to the 10 waiver of the 30-day waiting period as provided 11 in the regulations. 12 Thank you. 13 CHAIR KASSEKERT: Thank you. 14 Let me ask if each of the 15 participants -- perhaps we can see first if the 16 Commissioners have any questions of Bears & 17 Stearns [sic] or the law firm? 18 (No response.) 19 CHAIR KASSEKERT: I do. 20 (Laughter.) 21 CHAIR KASSEKERT: Mr. Shea, if you 22 wouldn't mind coming forward. 23 Good morning. 24 MR. SHEA: Good morning. 25 CHAIR KASSEKERT: I wanted to ask you 61 ITEM NO. 12 1 for the record and -- 2 MR. NANCE: Chair, he is an attorney? 3 MR. DiGIACOMO: Chair, swear the witness 4 for the record. 5 CHAIR KASSEKERT: Oh, yes. I'm sorry. 6 You're not an attorney, are you? 7 MR. SHEA: No, I'm not. 8 CHAIR KASSEKERT: Okay. I'll ask Mr. 9 Nance to swear you in. 10 Thank you for reminding me of that. 11 12 KENNETH SHEA, having been first duly 13 sworn to tell the truth, testified as follows: 14 15 MR. NANCE: Please state your name for 16 the record. 17 MR. SHEA: Kenneth Shea. 18 MR. NANCE: Please spell your name. 19 THE WITNESS: K-e-n-n-e-t-h, S-h-e-a. 20 MR. NANCE: Thank you. 21 CHAIR KASSEKERT: Thank you. Thank you 22 for reminding me about that. 23 Mr. Shea, can you talk a little bit 24 about the process that Bear Stearns intends to 25 use as we move forward and in the assisting the 62 ITEM NO. 12 1 Conservator in terms of vetting the possible 2 proposals? 3 THE WITNESS: Sure. Would you like me 4 to stand? I'm not used to the protocol. 5 CHAIR KASSEKERT: However you are most 6 comfortable. 7 THE WITNESS: Essentially, we would 8 start this process, in effect, gathering with 9 the management team with Gary Simpson, with 10 Michael Brown, Justice Stein, his colleagues, 11 gathering all the information from the company. 12 We then compile that information into what is 13 known as an offering memorandum which we would, 14 you know, have everyone review and provide 15 input on. 16 We have probably to this point received 17 inbound phone calls, both Justice Stein and 18 Bear Stearns and Debevoise, from about 25 19 interested parties. We have not made a single 20 outbound call subject to today's hearing, but 21 we're compiling all the folks that have 22 registered interest with us. 23 The next part of the process would be to 24 start calling people that have called us and to 25 call people that we know would have an interest 63 ITEM NO. 12 1 in an opportunity such as this. Charles 2 Edelman, my partner, and I have been in the 3 gaming industry for the last 11 years. I've 4 been at Bear Stearns since 1996. I run the 5 firm's gaming investment banking practice. 6 Charles runs the firm's M and A practice. So 7 what happens when we start to make the outbound 8 phone calls, we'll gather the folks that we 9 think have an interest, folks that have 10 expressed an interest in the property, and 11 we'll get them to sign a confidentiality 12 agreement. So no will one will receive any 13 information from us until we have prequalified 14 them, had them sign a confidentiality 15 agreement. 16 Once that all comes in, we'll then 17 establish a date for when we would, you know, 18 send out the offering material, and when we 19 would expect an initial indication back from 20 them. It's typically broken up into maybe two 21 stages. There's an initial indication phase 22 where people will come back and say, I've read 23 the offering memorandum, I've toured the 24 facility, I'm prepared to pay X. 25 At that point we're going to compile all 64 ITEM NO. 12 1 the initial indications, do some further 2 qualification. A lot of folks who are going to 3 express interest, they won't have the financial 4 wherewithal to do a transaction. They won't 5 have the ability to get licensed by this 6 Commission. So we're going to, you know, cut 7 through the folks that are not practical, you 8 know, people to remain in the process. We'll 9 winnow down the list. 10 We'll then go back to that smaller list 11 of folks that are interested and say, okay. At 12 this point we're going to offer up a property 13 tour, a meeting with the local management team. 14 We're going to have a virtual data room. So 15 all the information that we're compiling with 16 Justice Stein and Debevoise from the company, 17 we're going to put into a virtual data room. 18 So folks can come in. They'll be given a 19 password. They'll access the data room. 20 They'll do their legal and their business due 21 diligence. 22 And at the second kind of phase, we'll 23 say, okay. You now have an opportunity to kind 24 of come in, meet with folks, do more detailed 25 diligence. And we'll establish another date 65 ITEM NO. 12 1 and come in with a final indication. 2 And, you know, I think we understand. 3 We're cognizant of what the statute says in 4 terms of 120 days subject to, you know, 5 permission from the Commission to extend that 6 deadline. We have come up with a process that 7 will probably be 12 to 15 weeks that is inside 8 of what the legislation requires. And I think 9 that, you know, at the end of that process, 10 we'll be negotiating with the finalists, if you 11 will, to get to the finish line. 12 CHAIR KASSEKERT: And I know Bear 13 Stearns has a great deal of experience with 14 respect to gaming and you yourself. Can you 15 tell me what you think right now at the outset 16 are the most important factors you're going to 17 be looking at in terms of people applying and 18 seeking to buy the property? 19 THE WITNESS: Sure. Look. I think 20 that -- I think that, as I said earlier, we've 21 received a number of inbound inquiries. I'd 22 say that half of those inquiries are not folks 23 that we're going to continue in this process 24 with. What we're looking for are people that 25 are going to invest in the property, that are 66 ITEM NO. 12 1 going to bring it back to the prominence it 2 once enjoyed here in the marketplace, folks 3 that are licensable, folks that have the 4 ability to raise the financing, and presumably 5 folks that have, you know, operated casinos in 6 other jurisdictions. 7 Now, there's been a lot of discussion 8 today about the Harrah's transaction, and I'm 9 sure the Commission is well aware of the fact 10 that financial sponsor -- the financial sponsor 11 community has taken a renewed interest in the 12 gaming industry generally. So there are 13 inquiries from very reputable financial sponsor 14 outfits that have the money, are licensable, 15 but they may not necessarily own or operate 16 casinos today. But those folks will kind of 17 pass muster on the first screen as well. 18 So we're looking to their qualification 19 standards and their ability to finance a 20 transaction and their ability to kind of 21 position this properly. The Commission has 22 made the decision that, you know, a license is 23 a privilege, not a right. And, you know, when 24 you have a privilege to operate a license here, 25 you're supposed to invest in the property. And 67 ITEM NO. 12 1 we're looking for folks that will, you know, 2 honor that. 3 CHAIR KASSEKERT: Do you see the recent 4 issues with respect to the market and -- and, 5 of course, you know, starting with what has 6 occurred in the housing, the housing market, 7 impacting on this? Is this going to drive the 8 ability of people to finance at this point? Do 9 you see that an issue? 10 THE WITNESS: That's an excellent 11 question. 12 I think that we all read the papers, and 13 the economy is in not great shape. The debt 14 capital markets are not in great shape. And I 15 think, as the gentlemen were talking earlier 16 about the Harrah's transaction and the shifting 17 of the capital from a CMBA's structure to a 18 nonCMBS structure, what's going on is that 19 there's a little bit of gridlock in the 20 financing markets. 21 And so I think that, you know, when we 22 get to that point in time, hopefully, you know, 23 three months away, you know, the financing 24 markets will have improved a little bit. But 25 right now, there is a concern about raising 68 ITEM NO. 12 1 traditional financing. 2 CHAIR KASSEKERT: Okay. 3 THE WITNESS: Which, I think, gets back 4 to, we're cognizant of the 120 days. 5 CHAIR KASSEKERT: Days. 6 THE WITNESS: But I think the message 7 that the Commission needs to deliver is that 8 subject to the financing markets, you know, 9 cooperating, you know, we'll do what's 10 appropriate to, you know, run an efficient and 11 expeditious process. 12 CHAIR KASSEKERT: And do you think, 13 given the level of the property, and I know 14 you've been down there to look at it, do you -- 15 you feel it's a very sellable property? 16 THE WITNESS: I do. It's -- it's a 17 great location. It's a great property. It's 18 got great bones. I think, you know, the last 19 year, it's probably been let go a little bit. 20 And I think people have recognized that. I 21 think it can be brought up to snuff. And, I 22 think that, you know, it's the largest -- one 23 of the largest hotel properties in the city. 24 It's always been a great convention destination 25 location. It enjoys a great location on the 69 ITEM NO. 12 1 boardwalk, and it's a great place. And I think 2 that we can position it properly. 3 CHAIR KASSEKERT: Thank you. Very Good. 4 Let me ask if any other Commissioners 5 have questions. 6 Commissioner Epps? 7 COMMISSIONER EPPS: Is it your intention 8 or do you anticipate that your company will be 9 involved in doing the due diligence process 10 with respect to each potential buyer's 11 licensability? Meaning, will you make an 12 assessment of who their people are, what they 13 have? Or will they do it themselves and 14 present it to you? How does that work? 15 THE WITNESS: We typically -- because 16 Charles and I have been doing it this for more 17 than a decade. We kind of know who's real and 18 who's not. But we will do a -- not from a 19 legal perspective. We might do a due diligence 20 of someone's background. But we're going to 21 make sure that everyone that expresses an 22 interest in this process is someone that we vet 23 internally through our own research to make 24 sure this person stands a chance of being 25 someone that this Commission would deem 70 ITEM NO. 12 1 licensable. 2 COMMISSIONER EPPS: Okay. I guess that 3 was my real question. What is "licensability" 4 in your definition? 5 THE WITNESS: Well, with all due respect 6 to the Commission, I don't want to, you know, 7 step on your turf, but I think that -- I think 8 that, obviously, folks that operate casinos 9 today and have been licensed in other 10 jurisdictions, people of good character, people 11 that, you know, have at one time or another 12 been in the business and may not be in the 13 business today. I think that -- I'm not sure 14 how it's done. 15 COMMISSIONER EPPS: Okay. Well, I guess 16 what I was saying is at a high level, high 17 scope view of a company, you'll make an 18 assessment. You guys will probably make it. 19 You guys won't. So you don't necessarily drill 20 down to the more esoteric questions where it's 21 a closer call, and that's understandable. That 22 was just the basis of my question. 23 The second question is the market issue. 24 If you finished vetting your companies and 25 you've narrowed it down, but you get to a point 71 ITEM NO. 12 1 where you're almost -- you know, you're close 2 to who you would consider, but the market is 3 just not ripe. What happens in that interim? 4 And are other companies then precluded from 5 joining the fray if you have to wait for the 6 market to shift? 7 Do you follow my question? 8 THE WITNESS: Yes. I follow the 9 question. 10 We're not -- we will not preclude 11 someone that is suitable and someone that has 12 access to the financing from getting into the 13 process if the market has gone sideways. I 14 think that -- I think that what's important 15 here is what Justice Stein has done. He's 16 retaining Micky Brown. He's retaining Gary 17 Simpson and Pam Popielarski to make sure that 18 this property is kind of positioned and running 19 and open for business. And I know the 20 Commission and some of the staff are, you know, 21 organizing marketing efforts and publicity that 22 we're open for business. 23 So I think it's important that we've got 24 seasoned gaming operators in place to carry us 25 through this storm that we're in right now with 72 ITEM NO. 12 1 the capital markets. 2 COMMISSIONER EPPS: And in fairness, 3 with all due respect, I guess my concern is if 4 you go through your vetting process and you get 5 close to the end but then there's a delay, do 6 we then engage in that process again which 7 causes further -- a more protracted process 8 which just turns process into process, and it 9 causes this thing to lag? 10 MR. STEIN: Commission, if I could 11 respond to that. I don't anticipate that kind 12 of delay. I anticipate that we're going to be 13 able to produce a contract within the four 14 months. And although the debt markets may 15 exclude some potential buyers, there are other 16 potential buyers who could engage in this 17 transaction with their own resources. 18 COMMISSIONER EPPS: Okay. 19 MR. STEIN: And I think there are enough 20 of those that make me believe that we're going 21 to be able to meet the deadline or come very 22 close to meeting it. 23 COMMISSIONER EPPS: Okay. My concern 24 was with respect to the Chair's question as to 25 the market and causing undue delay. I wouldn't 73 ITEM NO. 12 1 want to see the company have to go through -- 2 or the property to have to go through that 3 process. 4 THE WITNESS: And I agree with Justice 5 Stein. I agree. I think that we have a robust 6 process, that there will be people that can 7 finance this acquisition and in the current 8 environment. 9 VICE CHAIR SOMMELING: Chair? 10 CHAIR KASSEKERT: Commissioner 11 Sommeling? 12 VICE CHAIR SOMMELING: Along the same 13 things, Mr. Shea, once the auction process has 14 been completed and some corporation has been 15 selected or group has been selected, how long 16 do you believe the sale would take to close? 17 Beyond that point. 18 THE WITNESS: Sure. I think the two 19 issues -- you get to the end, you negotiated 20 the definitive purchase agreement. It's going 21 to be subject to the Commission approving this 22 buyer. And the Commission can be involved at 23 any step of the way, if they'd like, in terms 24 of these are the three finalists. What do you 25 think? Do you have an initial opinion of 74 ITEM NO. 12 1 licensability here? And, you know, our intent, 2 notwithstanding the current capital markets, 3 typically, there would be no financing out, if 4 you will. Where you get to the finish line, 5 then the buyer says, well, gee, I don't have 6 the money yet. So we're going to prequalify 7 that as you get to the -- closer to the finish 8 line. 9 So, I'm not trying to dodge the 10 question. But I think the normal, you know, 11 process of getting licensed -- is that 90 days 12 on your part here? I'm not sure. 13 CHAIR KASSEKERT: Depends. 14 (Laughter.) 15 MR. SHEA: Yeah. 16 CHAIR KASSEKERT: It depends. 17 MR. STEIN: We could maybe estimate 30 18 to 60 days between the purchase agreement and 19 the closing. Depending on the financial 20 requirements. 21 CHAIR KASSEKERT: Yeah. And I think the 22 Commission has expressed its interest. You 23 know, we've been very much involved in this 24 every step of the way, had a good working 25 relationship with the Justice. And I'm sure 75 ITEM NO. 12 1 we'll continue to have a good working 2 relationship with you guys and the consultants 3 as we move forward so. 4 Commissioner Fedorko, do you have a 5 question? 6 COMMISSIONER FEDORKO: Yeah. Just so 7 I'm clear on this. Do you make a 8 recommendation to the Justice on a particular 9 buyer? Or do you just say who is -- who is -- 10 okay. Go ahead. 11 THE WITNESS: Yeah. Justice Stein and 12 Sean Mack and their colleagues will be involved 13 every step of the way. They're going to see -- 14 we'll maintain a buyers' log, if you will, 15 which is everyone that's expressed an interest 16 and everyone that we've reached out to. And as 17 we qualify people along the way in that 18 process, everyone that will be kept up to speed 19 as to -- kept abreast of who's involved and 20 who's not. At the end of the day, it who's 21 going to pay the highest price and who can 22 close this transaction. So it's certainty of 23 execution and it's price. And so we're not, 24 you know, cherry picking. It's pretty 25 objective. 76 ITEM NO. 12 1 MR. STEIN: And I think -- Commissioner 2 Fedorko, I think I've got the statutory 3 obligation, when push comes to shove, in 4 consultation with Bear Stearns and Debevoise 5 and with the Commission to make the selection 6 in the end, assuming you got two or three 7 buyers within a couple of dollars of each 8 other, to make the selection based on factors 9 such as licensability and background and 10 other-- other criteria. So in the end, Bear 11 Stearns is going to conduct the process. And 12 present to me the finalists. I'll be in touch 13 with the Commission, and we'll make the call at 14 the very end to make sure we get the very best 15 qualified buyer for this property. 16 COMMISSIONER FEDORKO: Thank you. 17 CHAIR KASSEKERT: Any other questions? 18 VICE CHAIR SOMMELING: No more questions 19 Madame Chair. 20 CHAIR KASSEKERT: Okay. Perhaps we 21 could have Micky, Pam, and Gary come up? Just 22 so we can introduce them and see if there are 23 any questions. 24 Mr. Mack, do you want to say anything 25 with respect to the consultants? 77 ITEM NO. 12 1 MR. MACK: We tried to lay out in our 2 petition the qualifications of these three 3 consultants, and they are very well experienced 4 in the gaming industry, particularly with the 5 Tropicana property. And if you have any 6 questions of them, they're here. 7 CHAIR KASSEKERT: Thank you. Let me ask 8 if -- 9 Commissioners Epps? 10 COMMISSIONER EPPS: Justice, if you 11 would, could you just address for the 12 Commission the issue of whether or not there's 13 any redundancy with respect to the two 14 management consultants and how they differ in 15 their roles? 16 MR. STEIN: I will, Commissioner. I 17 think both Micky Brown and Pam Popielarski are 18 experienced casino executives. Pam has 19 specific experience with the Tropicana Casino 20 for many years. Micky Brown has enormous 21 regulatory and operational experience at other 22 casinos. And my sense is, you know -- I'm not 23 an experienced casino operator by any -- 24 CHAIR KASSEKERT: But you're becoming 25 one. 78 ITEM NO. 12 1 (Laughter.) 2 MR. STEIN: And learning day by day. 3 But Mark Giannantonio, who's doing a splendid 4 job running this casino, was really left after 5 the Commission's decision without the resources 6 that a normal operating manager would have 7 because all of the Columbia Sussex executives 8 are, obviously, no longer available to him. 9 And I wanted him to have the ability to pick up 10 the phone and talk to and consult with and 11 speak personally with Micky and Pam and to draw 12 on their knowledge of the industry and their 13 own experiences, particularly in this critical 14 time because the Tropicana had lost market 15 share, and it wants to regain that as rapidly 16 as possible. 17 You may have read in the paper today 18 that they've begun the rehiring of a 19 significant number of employees. They've begun 20 a television advertising program, and they're 21 working very hard to bring back the market 22 share that it had previously. And I just 23 thought that both Micky Brown and Pam 24 Popielarski could help. 25 Gary Simpson has enormous financial 79 ITEM NO. 12 1 background because he served in that capacity 2 with Aztar, and he's going to be a tremendous 3 help to Mark. 4 So my sense is that there isn't any 5 redundancy, that this will compliment his 6 ability to get this casino running back at the 7 highest possible level. 8 COMMISSIONER EPPS: I guess my other 9 question is, are these consultants -- I guess 10 they're at your call and at Mark's call, so it 11 depends on who needs to consult. I mean, it 12 could be either way. 13 MR. STEIN: Sure. I think basically 14 Mark's going to determine the extent and nature 15 of their services to him, and I'll be in touch 16 with them by telephone and in person to hear 17 from them and how the casino is doing because I 18 talk to Mark every day first thing in the 19 morning and throughout the day. And both Micky 20 and Pam will be able to supplement his reports 21 to me by giving me daily indications of how 22 they think things are going. So I have an 23 overriding responsibility to make sure the 24 property is operating at its best level, and I 25 think they're going to be able to help me do 80 ITEM NO. 12 1 that. 2 CHAIR KASSEKERT: Any other questions? 3 COMMISSIONER FEDORKO: No. 4 VICE CHAIR SOMMELING: No, Madame Chair. 5 No more questions. 6 CHAIR KASSEKERT: Thank you very much. 7 Let me ask, any questions from Mr. 8 McDonough? 9 MR. McDONOUGH: No, thank you. 10 CHAIR KASSEKERT: Okay. Anything else? 11 I'll entertain a motion. 12 VICE CHAIR SOMMELING: Motion -- 13 CHAIR KASSEKERT: I think we'd better -- 14 COMMISSIONER EPPS: Chair, I move that 15 we -- 16 CHAIR KASSEKERT: Thank you. 17 COMMISSIONER EPPS: -- approve the 18 resolution and the interim form of order which 19 would; A, permit the Conservator and Trustee to 20 retain financial advisors, special counsel, and 21 other advisors for the sale of the property and 22 to hire or to ratify hiring of certain 23 officials and/or consultants for the former 24 casino licensees and other matters. 25 VICE CHAIR SOMMELING: Second. 81 ITEM NO. 12 1 CHAIR KASSEKERT: Motion has been made 2 and seconded. I don't believe this is a roll 3 call vote. 4 MR. NANCE: Yes, it is. 5 CHAIR KASSEKERT: It is a roll call 6 vote? 7 A roll call vote, please. 8 MR. NANCE: Commissioner Frulio? 9 COMMISSIONER FRULIO: Yes. 10 MR. NANCE: Commissioner Fedorko? 11 COMMISSIONER FEDORKO: Yes. 12 MR. NANCE: Commissioner Epps? 13 COMMISSIONER EPPS: Yes. 14 MR. NANCE: Vice Chair Sommeling? 15 VICE CHAIR SOMMELING: Yes. 16 MR. NANCE: Chair Kassekert? 17 CHAIR KASSEKERT: Yes. 18 MR. NANCE: The record will reflect that 19 the motion is unanimous. 20 MR. DiGIACOMO: Thank you, 21 Commissioners. 22 MR. STEIN: Thank you very much. 23 MR. NANCE: In accordance with 24 Resolution No. 07-12-12-26, the next closed 25 session of the Commission shall be held on 82 MERCEDA GOODING 1 Wednesday, January 30th, 2008, at 9:15 a.m. in 2 the Commission offices. 3 It is now time for the public 4 participation portion of the meeting. 5 CHAIR KASSEKERT: Is there anyone from 6 the public who wishes to be heard? 7 Seeing no one, I'll declare this 8 portion -- 9 Oh, I'm sorry, ma'am. You can come 10 forward. 11 MS. GOODING: Where do I go? This is my 12 first time. 13 CHAIR KASSEKERT: Right there in the 14 center table. 15 MS. GOODING: Good morning, everyone. 16 CHAIR KASSEKERT: Good morning. Would 17 you please state your name for the record. 18 MS. GOODING: I'm Merceda Gooding. I'm 19 an Atlantic City resident. 20 This is my first time coming to the 21 meeting. But I'm tired. I'm an Atlantic City 22 resident. I am a college student. I got six 23 more credits, and I will have my degree in 24 human resources management and business 25 administration. 83 MERCEDA GOODING 1 I went to every casino for a job. $9 2 internship. However, when I see exchange 3 students from a different country get the job I 4 want for $9 an hour, just to get their 5 experience so I can have advancement 6 opportunities for me and my family, I think is 7 crazy. I'm asking the Casino Control 8 Commission, since you all regulate the casinos, 9 laws, federal or state, to look into their 10 hiring practices. 11 You know the reputation about Atlantic 12 City residents? We on drugs. We don't want 13 nothing. We just are outcasts. And I'm tired. 14 Because I am an Atlantic City resident. I 15 should not have to leave Atlantic City for a 16 job or an opportunity when they have 13 casinos 17 here. I never been in jail before. I never 18 committed a crime. You might have heard about 19 me, that I was a housing activist, but that 20 shouldn't stop me for the opportunity. 21 It's a $9 an hour job. Things are 22 changing here, redevelopment. I live in 23 Lighthouse Plaza. They going to change that 24 into condos. I know what's going to happen. 25 But how am I going to better my life or my 84 MERCEDA GOODING 1 family life if the casino don't give somebody 2 like me an opportunity? 3 You know, the reputation in our 4 community is a lot of angry people because they 5 think that the casino come in our town. We got 6 a deal with the inconvenience of the traffic, 7 the crime, the prostitution, and the drug 8 activity. Yeah. It hit our neighborhoods, but 9 some of the drugs is here, too. 10 But I can't gain any opportunity for the 11 casino. I think it's time for an 12 investigation. And I keep on coming back for a 13 $9 an hour job and an opportunity for my 14 future. So I'm asking you, all of you, to look 15 into my matter. Because I seen everybody in 16 here -- and I'm pretty sure most of them is not 17 Atlantic City residents, but they getting all 18 what they want. I'm asking for a $9 an hour 19 job and the experience, the internship. And I 20 want to know why I am not hired. So if you 21 regulate the laws for the casino, it's time to 22 look into their hiring practices. 23 But I want to close into saying this, I 24 could get a job in mopping floors. I could get 25 a job of being a maid. Yeah. I might have 85 1 been a high school dropout, but now I am 2 educated. I graduated from Atlantic City 3 Community College two years ago. Now I'm at 4 Franklin University, which is an out-of-town 5 school, but it's a partnership with Atlantic 6 Community College. I have six more credits. I 7 also made the president list and the dean's 8 list. I could show you all those proofs. Why 9 I can't get a $9 an hour job? But I could get 10 a job to mop the floors. 11 Thank you very much. 12 CHAIR KASSEKERT: Thank you for coming. 13 We appreciate your comments. 14 MS. GOODING: Uh-hum. 15 CHAIR KASSEKERT: Is there anyone else 16 from the public who wishes to be heard? 17 (No response.) 18 CHAIR KASSEKERT: Seeing no one, I'll 19 declare this portion of the meeting closed and 20 entertain a motion to adjourn. 21 VICE CHAIR SOMMELING: Motion to 22 adjourn. 23 COMMISSIONER FEDORKO: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 86 1 (Ayes.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: Motion carries. 5 (Public Meeting 08-01-16 was adjourned 6 at 11:58 a.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 87 1 2 C E R T I F I C A T E 3 4 5 I, DARLENE SILLITOE, a Certified Court 6 Reporter and Notary Public of the State of New 7 Jersey, certify that the foregoing is a true 8 and accurate transcript of the proceedings. 9 10 11 I further certify that I am neither 12 attorney, of counsel for, nor related to or 13 employed by any of the parties to the action; 14 further that I am not a relative or employee of 15 any attorney or counsel employed in this case; 16 nor am I financially interested in the action. 17 18 19 DARLENE SILLITOE CCR 20 License No XI01023 21 22 Dated: January 21, 2008 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25