0001 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 09-03-18 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, March 18, 2009 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 10:36 a.m. to 1:25 p.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 0002 1 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 MICHAEL C. EPPS, VICE CHAIR MICHAEL A. FEDORKO, COMMISSIONER 4 WILLIAM T. SOMMELING, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 7 OFFICE OF THE GENERAL COUNSEL: 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 9 LEONARD J. DiGIACOMO, ASSISTANT GENERAL COUNSEL MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 10 TERESA M. NAGENGAST, SENIOR COUNSEL ROBERT A. MONCRIEF, COUNSEL 11 TRACY E. RICHARDSON, COUNSEL CLAIRE FRANK, PROGRAM MANAGER 12 BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 13 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 14 JOHN ADAMS, DEPUTY ATTORNEY GENERAL JAMES J. ARMSTRONG, DEPUTY ATTORNEY GENERAL 15 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 16 JAMES FOGARTY, DEPUTY ATTORNEY GENERAL LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL 17 DOROTHY TURI, DEPUTY ATTORNEY GENERAL 18 19 20 21 22 23 24 25 0003 1 A P P E A R A N C E S : 2 ITEM NO. 6 TERESA M. NAGENGAST, SENIOR COUNSEL LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL 3 FOX ROTHSCHILD MARIE JONES, ESQ. 4 FOR: ATRONIC AMERICAS, LLC AND ATRONIC INTERNATIONAL, GMBH 5 ITEM NO. 7 TERESA M. NAGENGAST, SENIOR COUNSEL 6 LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL STERNS & WEINROTH 7 GRIAG P. CORVELEYN, ESQ. FOR: POKER TEK, INC. AND TRUMP PLAZA 8 ASSOCIATES, LLC 9 ITEM NO. 8 TERESA M. NAGENGAST, SENIOR COUNSEL LOUIS ROGACKI, DEPUTY ATTORNEY GENERAL 10 FOX ROTHSCHILD PATRICK MADAMBA, ESQ. 11 FOR: ARISTOCRAT INTERNATIONAL PTY, LTD, ARISTOCRAT TECHNOLOGIES AUSTRALIA, PTY, 12 LTD, AND ARISTOCRAT TECHNOLOGIES, INC. 13 ITEM NO. 9 TRACY E. RICHARDSON, COUNSEL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 14 FOX ROTHSCHILD MARIE JONES, ESQ. 15 FOR: MGM MIRAGE AND MAC, CORP. 16 ITEM NO. 10 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL DOROTHY TURI, DEPUTY ATTORNEY GENERAL 17 STERNS & WEINROTH PAUL M. O'GARA, ESQ. 18 FOR: HARRAH'S ENTITIES 19 ITEM NO. 12 ROBERT A. MONCRIEF, COUNSEL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 20 TIMOTHY J. LOWRY, JR. ESQ. FOR: BOARDWALK REGENCY CORPORATION 21 ITEM NO. 13 TRACY E. RICHARDSON, COUNSEL 22 MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL PASHMAN STEIN 23 SEAN MACK, ESQ. FOR: TRUSTEE/CONSERVATOR JUSTICE STEIN 24 25 0004 1 A P P E A R A N C E S : Continued: 2 ITEM NO. 14 TRACY E. RICHARDSON, COUNSEL 3 JOHN E. ADAMS, JR., DEPUTY ATTORNEY GENERAL 4 PASHMAN STEIN SEAN MACK, ESQ. 5 FOR: TRUSTEE/CONSERVATOR JUSTICE STEIN 6 ITEM NO. 15 DIANNA W. FAUNTLEROY, GENERAL COUNSEL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 7 PASHMAN STEIN SEAN MACK, ESQ. 8 FOR: TRUSTEE/CONSERVATOR JUSTICE STEIN 9 ITEM NO. 16 LEONARD J. DiGIACOMO, ASSISTANT GENERAL COUNSEL 10 JOHN E. ADAMS, JR., DEPUTY ATTORNEY GENERAL 11 PASHMAN STEIN SEAN MACK,, ESQ. 12 FOR: TRUSTEE/CONSERVATOR JUSTICE STEIN STERNS & WEINROTH 13 PAUL M. O'GARA, ESQ. FOR: TROPICANA ENTERTAINMENT 14 WOLF BLOCK GILBERT BROOKS, ESQ. 15 FOR: COMMITTEE OF SECURED LENDERS 16 17 18 19 20 21 22 23 24 25 0005 1 AGENDA PUBLIC MEETING NO. 09-03-18 2 March 18, 2009, 10:36 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 9 9 March 4, 2009, public meeting 4 2 Applications for employee and casino service industry licenses 5 39 initial and/or renewal of casino key 9 10 and casino employee licenses 6 4 initial and/or renewal of casino key 10 10 and casino employee licenses 7 Application for initial and renewal of 11 11 casino key employee licenses and for 8 qualification of Edward Garruto, Senior Vice President of Finance for Adamar of New Jersey, Inc. 9 3 Stipulations of settlement and consent agreements: a) Donald R. Peterson, Jr. (08-00422-EA) 11 13 10 b) Keywana M. Young (08-0895-EA) 11 13 c) Evelyn Echevarria (08-0814-ER) 11 13 11 d) Karen M. McDonald (08-0129-ER) 11 13 e) Ruan C. Pugh (08-0209-RC) 11 13 12 f) Christopher R. Bastian (07-0517-ER) 11 13 4 Application for suspension of Mia K. Fiola 13 14 13 (09-0104-RC) 5 Reconsideration of Commission final orders 14 due to noncompliance of conditions therein: a) Rufus J. Bloomfield, Jr. (08-0640-NC) 15 18 15 Sworn 16 b) Cheryl M. Brantley (08-0638-NC) 19 31 16 Sworn 20 c) Louis A. Dello-Russo, III (08-0060-NC) 45 46 17 D) Mack D. Ragsdale, III (07-0750-NC) 32 44 Sworn 33 18 e) Jacqueline N. Rice (08-0603-NC) 45 46 6 Petitions of casino licensees to do 47 50 19 Business with Atronic Americas, LLC, and Atronic International, GMBH nunc pro tunc: 20 a) Adamar of New Jersey, Inc. (d/b/a Tropicana casino Resort) (PRN 2380814) 21 b) Resorts International Hotel, Inc. (d/b/a Resorts International, Inc.) (PRN 2380815) 22 c) Trump Marina Associates, LLC (d/b/a Trump Marina Associates, LLC (d/b/a Trump Marina 23 Hotel Casino) (PRN 2380816) 7 Petition of Poker Tek, Inc., and Trump 50 57 24 Plaza Associates, LLC, for extension of transactional waiver nunc pro tunc 25 0006 1 CONTINUED AGENDA PUBLIC MEETING NO. 09-03-18 2 March 18, 2009, 10:36 a.m. ITEM PAGE VOTE 3 8 Petition of Aristocrat International PTY, 57 63 LTD., Aristocrat Technologies Australia 4 PTY, LTD, and Aristocrat Technologies, Inc., for waiver of qualification (PRN 3360801) 5 9 Consideration of the qualification of 64 66 John McManus to serve as Senior Vice 6 President, Assistant General Counsel, and Assistant Secretary of MGM Mirage and 7 Assistant Secretary of MAC, CORP. 10 Petition of Harrah's Entertainment, Inc., 66 67 8 and Harrah's Operating Company, Inc., for approval of an exchange offer and other 9 relief (PRN 0690901) 11 Proposed readoption of NJAC 19:48 78 79 10 (Exclusion of Persons) 12 Petition of Boardwalk Regency Corporation 80 82 11 (d/b/a Ceasars Atlantic City) to amend its operation certificate and related 12 relief (PRN 0650901) 13 Petition of the Trustee and Conservator 82 86 13 for Adamar of New Jersey, Inc., to modify financial reporting procedures (PRN 0550903) 14 14 Petition of the Trustee and Conservator 86 89 for Adamar of New Jersey, Inc., to modify 15 CCC Order No. 08-06-30-1 with regard to the engagement agreement with Moelis & Company, 16 LLC (PRN 0560901); and Petition of JP Morgan Securities, Inc., for 17 relief from certain provisions of CCC Order No. 08-06-30-1 requiring the Petitioner to 18 file a completed non-gaming CSI license application (PRN 0560903) 19 15 Consideration of the applications of the 112 116 Trustee and Conservator for the former 20 casino licensee, Adamar of New Jersey, Inc., for approval of fees for the 21 Conservator/Trustee, his personal counsel, legal, and other consultants 22 16 Petition of the Trustee and Conservator 89 111 for Adamar of New Jersey, Inc., to extend 23 the sale period (PRN 0750903) 24 25 0007 1 E X H I B I T S : 2 NO. DESCRIPTION EVD 3 4 P-1 Remand for hearings 39 licenses X 5 P-2 Grant 4 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.) 0008 1 (Public Meeting 09-03-18 was commenced 2 at 10:36 a.m.) 3 MR. NANCE: Good morning. I'd like to 4 read an opening 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 7, 2008, filed with the 10 Secretary of State at the State House in 11 Trenton, New Jersey, a notice of this hearing. 12 On October 7, copies were mailed to 13 subscribers. 14 Members of the press will be permitted 15 to take photographs, and we ask that this be 16 done in a manner which is not disruptive or 17 distracting to the Commission. 18 The use of cellular telephones in the 19 public meeting room while the Commission is in 20 session is prohibited. 21 Any member of the public who wish to 22 address the Commission will be given the 23 opportunity to do so before the Commission 24 adjourns for the day. 25 Would everyone please stand for the 0009 1 Pledge of Allegiance. 2 (The flag salute was recited.) 3 CHAIR KASSEKERT: Good morning. 4 MR. NANCE: Good morning. 5 The matters discussed in closed session 6 were: Employee and enterprise license matters. 7 The Commissioners approved the March 8 4th, 2009, closed session minutes. 9 Item No. 1, ratification of the minutes 10 of March 4, 2009, public meeting. 11 COMMISSIONER SOMMELING: Move to 12 approve. 13 COMMISSIONER FEDORKO: Second. 14 CHAIR KASSEKERT: The motion has been 15 made and seconded. All in favor? 16 (Ayes.) 17 CHAIR KASSEKERT: Opposed? 18 (No response.) 19 CHAIR KASSEKERT: Motion carries. 20 MR. NANCE: Item No. 2, application for 21 employee and casino service industry licenses. 22 This agenda item will be entered as Exhibit 23 Lists 1 and 2. 24 Exhibit List 1 consists of 39 25 applications for initial and/or renewal of 0010 1 casino key and casino employee licenses. 2 The Division has objected to licensure. 3 VICE CHAIR EPPS: Motion to remand for 4 hearing. 5 COMMISSIONER SOMMELING: Second. 6 COMMISSIONER FEDORKO: 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 MR. NANCE: Exhibit List 2 consists of 14 four applications for initial and/or renewal of 15 casino key and casino employee licensure. 16 Staff and the Division have recommended 17 that these licenses be granted. 18 COMMISSIONER FEDORKO: Motion to grant 19 applications. 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.) 0011 1 CHAIR KASSEKERT: Motion carries. 2 MR. NANCE: For consideration is the 3 casino key employee license application of 4 Edward Garruto and for qualification as Senior 5 Vice President of Finance for Adamar of New 6 Jersey, Inc. 7 Staff and the Division have recommended 8 that this application be granted. 9 COMMISSIONER FEDORKO: Motion to grant 10 initial key license for qualification. 11 COMMISSIONER SOMMELING: Second. 12 CHAIR KASSEKERT: Motion is made and 13 seconded. This is a roll call vote. 14 MR. NANCE: Commissioner Fedorko? 15 COMMISSIONER FEDORKO: Yes. 16 MR. NANCE: Commissioner Sommeling? 17 COMMISSIONER SOMMELING: Yes. 18 MR. NANCE: Vice Chair Epps? 19 VICE CHAIR EPPS: 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. 3, stipulation of settlement 25 and consent agreements. When I call your name, 0012 1 please come forward, stand behind the center 2 table so that you may be seen: Donald 3 Peterson, Jr., Keywana Young, Evelyn 4 Echevarria, Karen McDonald, Ruan Pugh, and 5 Christopher Basian. 6 CHAIR KASSEKERT: Has everyone whose 7 name been called come forward at this time? 8 Okay, sir. I'm going to ask you state 9 your name for the record. 10 MR. PETERSON: Donald R. Peterson, Jr. 11 CHAIR KASSEKERT: Thank you. 12 In a moment we're going to vote on the 13 stipulation which you've agreed to with the 14 Division of Gaming Enforcement. I'm going to 15 ask at this point if you wish to be heard on 16 this matter. You don't have to say anything if 17 you don't want to. 18 Do you wish to be heard? 19 MR. PETERSON: No. 20 CHAIR KASSEKERT: Okay. Thank you. 21 Mr. Armstrong? 22 MR. ARMSTRONG: I have nothing, Madame 23 Chair. Just ask the Commission to approve 24 these settlements. 25 CHAIR KASSEKERT: Thank you. 0013 1 Any questions? 2 COMMISSIONER FEDORKO: Motion to 3 approve. 4 COMMISSIONER SOMMELING: 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 MR. NANCE: Item No. 4, application for 13 suspension of Mia Fiola. 14 Miss Frigen? 15 MS. FRIGEN: Before we hear from the 16 Division, let me just ask if Miss Fiola is 17 present or represented? 18 (No response.) 19 MS. FRIGEN: Okay. She apparently is 20 not here today. 21 CHAIR KASSEKERT: Thank you. 22 Mr. Armstrong? 23 MR. ARMSTRONG: Chair, I would just rely 24 on our pleadings in this matter since Miss 25 Fiola is not here and ask that she be suspended 0014 1 at this time. 2 CHAIR KASSEKERT: Thank you. 3 Any questions? 4 COMMISSIONER SOMMELING: No questions, 5 Madame Chair. 6 VICE CHAIR EPPS: Madame Chair, I move 7 that we grant the Division's application and 8 suspend Miss Fiola's casino license. 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. NANCE: Item No. 5, reconsideration 17 of Commission final orders due to noncompliance 18 of conditions therein: Rufus Bloomfield, Jr., 19 Cheryl Brantley, Louis Dello-Russo, III, Mack 20 Ragsdale, III, Jacqueline Rice. 21 Miss Frigen? 22 MS. FRIGEN: Madame Chair, 23 Commissioners, as indicated, these matters are 24 being presented to the Commission due to the 25 licensees failure to comply with licensure 0015 1 conditions. 2 There are several individuals present 3 this morning to address the Commission, the 4 first being Rufus Bloomfield. I would ask Mr. 5 Bloomfield to come up and have a seat at the 6 table. 7 The Commission entered an order in July 8 of 2007 granting Mr. Bloomfield his casino 9 employee license with conditions regarding his 10 compliance with certain payment arrangements 11 and reporting to the Division. He subsequently 12 failed to do that. 13 The Division asked the Commission to 14 take appropriate action. 15 There was a conference scheduled for 16 October 28th, and in speaking with Mr. 17 Bloomfield recently, he probably did not 18 receive notice of that conference due to a 19 change-of-address situation. But he had been 20 provided with earlier notices from the Division 21 regarding his need to report. 22 Mr. Bloomfield yesterday provided some 23 updated information, documentation which I've 24 provided to the Commission as well as to the 25 Division. And he is here today to address the 0016 1 Commission regarding his noncompliance 2 situation. 3 CHAIR KASSEKERT: Thank you. 4 Shall we hear from the Division first? 5 Is there a motion -- or Mr. Bloomfield? 6 MS. FRIGEN: Well, actually, it may be 7 Mr. Bloomfield. My understanding was that the 8 Division wished to reserve their position. 9 CHAIR KASSEKERT: Until that we heard 10 from -- 11 MS. FRIGEN: Until we heard from Mr. 12 Bloomfield regarding his explanation regarding 13 the noncompliance. 14 CHAIR KASSEKERT: Okay. Mr. Bloomfield 15 would you stand to be sworn in, please? 16 17 RUFUS J. BLOOMFIELD, JR., was duly sworn 18 to testify in this matter. 19 20 MR. NANCE: Please state your name for 21 the record. 22 MR. BLOOMFIELD: Rufus Bloomfield, Jr. 23 MR. NANCE: Thank you. 24 CHAIR KASSEKERT: Mr. Bloomfield, what 25 would you like to tell us today? 0017 1 MR. BLOOMFIELD: Well, first of all, I'd 2 like to apologize for the way I've been 3 neglecting this. But I have been paying on the 4 taxes that I promised to pay. But I really 5 couldn't pay 'em the way I promised to pay them 6 because financially I wasn't able to. Once I 7 started back to work, I had financial problems. 8 I was evicted from the place that I was staying 9 at. I was homeless. But what I did do was, I 10 went to the IRS, and I made an agreement with 11 them that where I worked at would take so much 12 money out of my check each week and directly 13 send it to the IRS, because I just wasn't able 14 to do it. It was easier for me to have where I 15 work at to take it out and send it to them. 16 That way they would get it. 17 And just like to apologize. 18 CHAIR KASSEKERT: Okay. And you -- this 19 information has been provided to the Division? 20 MS. FRIGEN: Yes. 21 CHAIR KASSEKERT: Mr. Armstrong? 22 MR. ARMSTRONG: Chair, I would just note 23 for the record that the information we did 24 receive is a payroll deduction agreement Mr. 25 Bloomfield entered with the IRS on -- last 0018 1 Friday, on Friday, March 13th. Apparently, he 2 hasn't been in compliance with your order or 3 with the agreement reached with the Division 4 back in 2007. 5 I would ask that this matter be remanded 6 for further conferences just so we can make 7 sure that this agreement that he has now with 8 the IRS is, in fact, implemented and that he's 9 going to assure us that he's going to continue 10 to report to the Division on it on a quarterly 11 basis as he originally agreed to as is in your 12 order, as well. 13 CHAIR KASSEKERT: Let me ask if any of 14 the Commissioners have any questions? 15 COMMISSIONER FEDORKO: Madame Chair, I 16 make a motion to remand this for further 17 conferences. 18 COMMISSIONER SOMMELING: 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 We're going to remand this. You'll be 0019 1 notified, Mr. Bloomfield, about conferences. I 2 would, you know, with all due respect, urge you 3 to comply with that so that the Division can 4 make a determination as to this wage execution 5 agreement being set up. And I'd urge you to, 6 you know, check your mail and make sure you're 7 there for those conferences. Okay? 8 MR. BLOOMFIELD: Thank you. 9 CHAIR KASSEKERT: Thank you. 10 (Conferring.) 11 MS. FRIGEN: Okay. The next case we 12 have, Madame Chair and Commissioners, is Cheryl 13 Brantley. 14 Miss Brantley? 15 Okay. In this situation the 16 Commission's order was dated December 12th of 17 2007, and, again, Miss Brantley was licensed 18 with conditions regarding her addressing 19 certain financial debt and reporting to the 20 Division. She subsequently failed to adhere to 21 those reporting conditions and to come for a 22 conference on October 21st, and the matter is 23 now presented to you for consideration. 24 I would note that Miss Brantley also 25 recently provided a letter of explanation 0020 1 regarding her situation as well as financial 2 documentation, copies of which I provided to 3 you as well as to the Division. 4 MR. ARMSTRONG: The Division has not 5 received that. 6 MS. FRIGEN: That was the faxes. The 7 multiple faxes. The letter. 8 MR. ARMSTRONG: Oh, okay. 9 MS. FRIGEN: Right. You got that? 10 MR. ARMSTRONG: Okay. 11 MS. FRIGEN: Remember? 12 MR. ARMSTRONG: Yes. The evidence of 13 the student loan papers? 14 MS. FRIGEN: Yes. Okay. 15 And Miss Brantley is also here this 16 morning to address the Commission regarding her 17 situation. 18 CHAIR KASSEKERT: Okay. Miss Brantley, 19 will you stand and be sworn in, please. 20 21 CHERYL M. BRANTLEY was duly sworn to 22 testify in this matter. 23 24 MR. NANCE: Please state your name for 25 the record. 0021 1 MS. BRANTLEY: Cheryl Brantley. 2 MR. NANCE: Thank you. 3 CHAIR KASSEKERT: Okay. Miss Brantley, 4 what would you like to tell us today? 5 MS. BRANTLEY: First of all, again, I 6 apologize to the Commission for administrative 7 work. Everything that the Commission had asked 8 me to do with the exception of my 9 administrative work, I did. I made all the 10 arrangements with each party and started paying 11 down my debt. I also got J. K. Harris, which 12 was a company outside to be able to represent 13 me to the federal government for that portion 14 of it. I paid them $1500, which I placed in 15 evidence, that I continuously had paid them out 16 of my checking account, and they did nothing 17 for that. That was an outside agency. I also 18 went up to the federal government, asked them 19 whether they had contacted them because as I 20 was contracted. I provided the information 21 that I was contracted, did that. Made sure all 22 my taxes are paid up and continued with the 23 state and paid them up, but I didn't do my 24 administrative duties. 25 I also have a number of health 0022 1 conditions, and also a heart attack with my 2 mother, all in 2008. But I still continued to 3 make sure that the money was taken out. But I 4 didn't do, and I apologize to the Commission 5 the administrative part of telling them of my 6 activities. 7 CHAIR KASSEKERT: And did you attend all 8 the conferences that -- 9 THE WITNESS: I did not attend all the 10 conferences. Also, our complex changed all of 11 our addresses, the same address with different 12 apartment numbers, too. But? 13 CHAIR KASSEKERT: Did you receive the 14 notices? 15 THE WITNESS: Working 12 -- 1200 days. 16 I got two of the -- I got the last notice. But 17 I'm working, like, 10 to 12 hours a day. And 18 I'm just taking care of and have been taking 19 care of my bills, the mountain of debt of 20 obligations that I've had. And, again, that's 21 what I did do. 22 CHAIR KASSEKERT: Okay. Let me ask if 23 the Commissioners have any questions before we 24 hear from Mr. Armstrong? 25 COMMISSIONER SOMMELING: No questions, 0023 1 Madame Chair. 2 CHAIR KASSEKERT: Okay. Mr. Armstrong? 3 MR. ARMSTRONG: Chair, Commissioners, 4 Miss Brantley's case we -- when we settled this 5 case, she was applying for a key license, and 6 she had these tax problems in her background. 7 And we put in a settlement what we call 8 subsequent conditions where she was supposed to 9 negotiate payments with the State and the IRS 10 to address her tax liabilities and report to us 11 on a quarterly basis beginning April 1st. From 12 what I saw -- and she also had a student loan 13 in default that she was to continue to pay. 14 From what I saw what she submitted earlier, all 15 she's complied with is the student loan. She 16 hasn't -- as far as we can tell, the agreements 17 she had with J. K. Harris with the IRS is no 18 longer in effect. She never did negotiate a 19 payment agreement with them. I couldn't tell 20 from what she submitted whether or not she's 21 been consistent or has paid off the State tax 22 debt. 23 Nevertheless she never reported to us -- 24 her compliance with actually negotiating the 25 payment agreements and then compliance with the 0024 1 payment agreements as a condition of her 2 licensure. Key licensure. 3 THE WITNESS: Can I say something else? 4 CHAIR KASSEKERT: Yes. Sure. 5 THE WITNESS: Yes, I did. And I 6 provided you with money orders and everything 7 else. I also provided you with a document from 8 the State showing that I had paid into it. I 9 also provided you with documentation that I 10 continued on the student loan. I also provided 11 you with documentation in here showing that the 12 401-K loans that I took out, again, even with 13 that, I could not even get another loan just to 14 even pay off that IRS myself. But as of April 15 the 1st, that's my next time that I paid off 16 this loan that I can myself. 17 MR. ARMSTRONG: By "loan" do you mean 18 the student loan? 19 THE WITNESS: No. No. No. I got the 20 student loan. That's separate. 21 MR. ARMSTRONG: Okay. 22 THE WITNESS: Because I had two 401-K 23 loans, and I couldn't even enter a plan because 24 there was no more money with the federal 25 government after J. K. Harris took my money. 0025 1 And I provided you with that, and I provided 2 you with the bank statement showing where I 3 entered an agreement. I provided you with the 4 statement showing -- 5 MR. ARMSTRONG: I got to be honest with 6 you, ma'am. The fax came in in multiple 7 levels. You know, from what saw, from the 8 letters from you to the State, in which you 9 were -- you were addressing what you thought 10 were -- or -- 11 THE WITNESS: No. 12 MR. ARMSTRONG: -- saying were payments 13 to the State. 14 THE WITNESS: There's a document in here 15 that I provided showing that. 16 MR. ARMSTRONG: I may or may not have 17 that. I'm not sure. 18 Cut to the chase. Do you have a payment 19 agreement with the New Jersey Division of 20 Taxation? 21 MS. BRANTLEY: Yes. 22 MR. ARMSTRONG: That was a formal 23 agreement? 24 MS. BRANTLEY: And you have that. 25 MR. ARMSTRONG: I did not see that. 0026 1 Do you have a formal agreement with the 2 IRS? 3 MS. BRANTLEY: No, I do not. 4 MR. ARMSTRONG: All right. 5 CHAIR KASSEKERT: All right. Let me ask 6 if any Commissioners have any questions. 7 COMMISSIONER SOMMELING: I just want to 8 clarify one thing. 9 The J. K. Harris -- excuse me. J. K. 10 Harris was supposed to do what for you? 11 MS. BRANTLEY: Make arrangements, 12 payment arrangements with the federal tax -- 13 COMMISSIONER SOMMELING: For your 14 federal taxes? 15 MS. BRANTLEY: Yes. 16 COMMISSIONER SOMMELING: And you're 17 saying they did nothing? 18 MS. BRANTLEY: They did nothing. And I 19 can show in my bank account and also the signed 20 contract that I made with them to do that. 21 Unfortunately, I believed the hype on a 22 television ad. I believed it, and I paid 23 toward it, and I got beat and to the tune of 24 $1500. 25 COMMISSIONER SOMMELING: $1500? 0027 1 MS. BRANTLEY: $1500. And originally it 2 was going to be 3500 before I made a stop on 3 it. You know, and I just couldn't pay anymore. 4 And I kept calling them. They kept saying, oh, 5 they were in the act of already talking to the 6 federal government. They were already doing 7 this, they were already doing that, and I got 8 beat by the -- bottom line. 9 COMMISSIONER SOMMELING: No more 10 questions, Madame Chair. 11 CHAIR KASSEKERT: Any -- Commissioner 12 Epps? 13 VICE CHAIR EPPS: I have a question for 14 the Division. 15 If we adjourn this for a cycle as 16 opposed to remanding it, would you have an 17 opportunity to look at what you received and 18 determine whether or not you feel comfortable 19 with a remand, or if you think that, based on 20 what you have and what you've seen, it's still 21 not a posture? 22 MR. ARMSTRONG: I -- I -- 23 VICE CHAIR EPPS: I mean, do you 24 understand my question? 25 MR. ARMSTRONG: Yeah. I understand it, 0028 1 Commissioner. 2 VICE CHAIR EPPS: Because you just got 3 stuff that you haven't had a chance to look at 4 it. 5 MR. ARMSTRONG: I glanced at it. I 6 didn't see with regard to what Miss Brantley's 7 addressing, I don't see -- I know what the 8 payment agreements with the Division of 9 Taxation look like. I did not see it. I may 10 not, in fact, have it within my file. There 11 was a problem with the fax. I actually got, 12 like, three different faxes. 13 VICE CHAIR EPPS: That's going to be 14 my -- 15 MR. ARMSTRONG: Apparently, it's the 16 Commission's fax. Because it came from you 17 guys. The papers were sticking together or 18 something to that nature. 19 CHAIR KASSEKERT: It's your fax machine, 20 Mr. Armstrong. 21 VICE CHAIR EPPS: I'm going to recommend 22 we impose -- or that would be my 23 recommendation, that we impose -- 24 MR. ARMSTRONG: If you want to remand 25 it, that's fine, too. 0029 1 VICE CHAIR EPPS: All right. Fine. 2 MR. ARMSTRONG: We can work this out 3 without another conference. We just need to 4 emphasize with Ms. Brantley and Mr. Bloomfield, 5 the importance of when they enter agreements 6 with the Division, and the Commission, you 7 know, grants these licenses with the conditions 8 on them that they have to comply with them. I 9 think -- quite frankly, I think it gives our 10 reputation, you know, in the industry in a 11 sense that we, you know, go into these 12 agreements, and folks like Miss Brantley and 13 Mr. Bloomfield can go on months and months 14 without living up to their condition. And, 15 yeah, even now at the 11th hour, they're going 16 to get a second chance here. And, you know, I 17 don't know what that does for the overall 18 effects of all those other settlements that we 19 have out there and all the other Commission 20 orders granting conditions licenses with 21 conditions and folks, if they got wind of this, 22 say, oh, yeah, that person got by for over a 23 year without paying their taxes, and a 24 condition of their licensure and, you know, 25 I've been complying with it all along. Where's 0030 1 the fairness there? 2 VICE CHAIR EPPS: What I'm hearing from 3 you is there's no strong objection to remand, 4 so I would move that we remand. 5 MR. ARMSTRONG: I would certainly not 6 like to see Miss Brantley lose her license, 7 when she's trying to comply. 8 VICE CHAIR EPPS: Okay. 9 MR. ARMSTRONG: But at the end of the 10 day, she has to leave here this morning with 11 the idea that she can't ignore -- she can't -- 12 she ignored a letter from us. She ignored a 13 letter from us for to you asking for the matter 14 to be reopened. She ignored a letter from the 15 Commission telling her to attend a conference. 16 She ignored another letter from the Commission 17 demanding a written explanation. And then she 18 pretty much, from my understanding, ignored a 19 letter telling her to come here this morning 20 until she received a phone call from your 21 staff. 22 So, you know, we can't have -- I would 23 imagine these other people that aren't here 24 this morning, they're going to lose their 25 license. You know, and we have to make that 0031 1 understood to Miss Brantley and Mr. Bloomfield 2 that, you know, this is important. 3 COMMISSIONER SOMMELING: I'll second the 4 motion. 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 I think Mr. Armstrong spoke pretty 12 succinctly, and you've heard what he said with 13 respect to compliance. And we're going give 14 you a second chance. You came here this 15 morning. You provided an explanation, so we 16 are going to give you that second chance, but 17 you've got to comply. And especially with an 18 individual who wants to hold a key license 19 which is, you know, a much higher standard. 20 Okay? 21 MS. BRANTLEY: Yes. Thank you very 22 much. 23 CHAIR KASSEKERT: You're welcome. Thank 24 you. 25 MS. FRIGEN: Madame Chair, 0032 1 Commissioners, this morning Mack Ragsdale came 2 in. I haven't had an opportunity to speak with 3 him in too much detail previously. He just 4 showed up this morning, but he is here as well. 5 Mr. Ragsdale? 6 Okay. With respect to Mr. Ragsdale's 7 case, the Commission granted his casino 8 employee license February 2007, conditioned 9 upon a wage execution addressing two debts. 10 And his providing proof of payment to the 11 Division every six months. He fell out of 12 compliance with that agreement. The Division 13 asked the Commission to take appropriate 14 action. 15 Mr. Ragsdale -- my notes here -- he did 16 attend a conference February 5th of 2008. He 17 didn't, though, attend thereafter conferences 18 on March 4th, August 5th. He must have 19 provided explanations because they were 20 rescheduled for yet a third conference on 21 November 6th. He did not show for that 22 conference. And consequently the matter is now 23 before you for consideration. 24 CHAIR KASSEKERT: Mr. Ragsdale, what 25 would you like to say today? 0033 1 And please stand up and be sworn in if 2 you want to speak. 3 4 MACK D. RAGSDALE, III, was duly sworn to 5 testify in this matter. 6 7 MR. NANCE: Please state your name. 8 MR. RAGSDALE: Mack Ragsdale. 9 MR. NANCE: Thank you. 10 CHAIR KASSEKERT: What would you like to 11 tell us today, Mr. Ragsdale? 12 MR. RAGSDALE: Well, I don't want to 13 make any -- any excuses for not appearing, for 14 not bringing the receipts in. It's just -- my 15 whole thing, I want to know if this thing could 16 just be resolved with those dismissed get 17 behind me. But I've been going through this 18 thing -- 19 CHAIR KASSEKERT: Well, then, you've got 20 to give us an explanation, frankly. 21 MR. RAGSDALE: Yeah. I'm -- for sure. 22 For sure. Because I've been going through this 23 situation for over ten years now. Something I 24 did when I was young, I did -- served my time, 25 came home and had no problems in over those ten 0034 1 years. After every stipulation that I had with 2 the Casino Commission I abided by. Had a 3 five-year suspension. Didn't get in any 4 trouble. Got my job back, got my license back. 5 Worked in the casino for three years. 6 Honestly, no disrespect for anybody that works 7 in the casino, but I felt as though it's 8 like -- it's not some way where you can -- you 9 can really -- what's the word to say? Not to 10 say dead end, but it's kind of a dead-end 11 situation. And so when I was working with the 12 casino, I went to school for myself, technical 13 school, got a trade. Became a electronics 14 tech. Now I work for Atlantic City Water 15 Company as electronics tech. And I just want 16 to have the option to be able to come to the 17 casino to have a second part-time job if I -- 18 if need be. 19 Now, every six months, to bring a 20 receipt saying that I'm paying my surcharges or 21 fine, I -- I tend to forget. And six -- if I 22 brought a receipt now and then six -- but then 23 six months, if the date is March 19th, I might 24 forget. It's a lot. I stay by myself. I take 25 care of two children. I work. I live -- live 0035 1 a quiet life. And there's so much going on, me 2 by myself, I tend to forget. I don't want to 3 make an excuse, but I tend to forget. And if I 4 don't -- 5 CHAIR KASSEKERT: Mr. Ragsdale, you 6 signed a document that said that's what you 7 would do to comply. 8 MR. RAGSDALE: I understand that. Then 9 I was working in the casino, so I was going 10 through the wage -- you know, the wage 11 execution. We was doing everything to be taken 12 out. And I don't miss it if I don't see it. 13 But I haven't been in a casino. And it's -- if 14 I don't get the letter saying this is what I 15 got to do, I -- I don't remember. I don't 16 remember. And if I don't pay my surcharges to 17 the DMV, I can't drive. I lose my license with 18 the MUA. So that's -- I'm going to pay. If I 19 don't pay a fine, a warrant come -- warrant 20 goes out. I get arrested. So I got to pay. I 21 mean, everything is getting paid every month. 22 I was supposed to. 23 But just bringing -- and it's almost 24 over. I mean, with the surcharges, I'm 25 probably like 200 -- $400, and my fine I'm 0036 1 probably around the same. It's get -- it gets 2 taken care of, but just that responsibility to 3 bring this paperwork here every six months 4 isn't -- it's not stressful, but it's not as 5 stressful when I'm in this predicament where I 6 may lose the opportunity to work a part-time 7 job. 8 CHAIR KASSEKERT: All right. 9 MR. RAGSDALE: For not bringing it. 10 CHAIR KASSEKERT: All right. 11 Let me ask if any of the Commissioners 12 have any questions before we hear from Mr. 13 Armstrong? 14 VICE CHAIR EPPS: I mean, I guess the 15 one question I have is, what is outstanding? 16 What remains to be paid? What are you paying? 17 MR. RAGSDALE: Surcharges. 18 VICE CHAIR EPPS: Insurance surcharges. 19 MR. RAGSDALE: DMV. 20 VICE CHAIR EPPS: For a Motor Vehicle 21 situation? 22 MR. RAGSDALE: Yes. 23 VICE CHAIR EPPS: What is the balance 24 that's outstanding? 25 MR. RAGSDALE: It's a close -- close 0037 1 number, it has to be about 333. There's 111 a 2 month. Because it was 50. It went up. It's 3 111 a month. So it has to be around 333, 4 somewhere around there. Another payment is due 5 next week, so it should be even lower than. 6 I brought -- I brought a receipt the 7 last time I had a conference that showed that I 8 was paying. But, I mean, another six months I 9 got to bring another receipt. But it's not 10 really -- it's not outstanding bill. It was. 11 But I worked it down from 3,000 to where it's 12 at now. I got it paid. I continue to pay it 13 so I can keep my license. 14 It's just -- it's just the simple fact 15 of me having to remember to bring it here every 16 six months. And if I don't, I got to go 17 through this situation again, and I just been 18 here over and over again for over 10, 11 years. 19 And I don't understand by me bringing a receipt 20 from DMV, what does that have to do with my 21 situation and my job with the casino? When I 22 don't work for the casino, or the casino 23 doesn't govern whether if I don't pay, they do 24 something as far as arresting me or something. 25 I just don't understand. 0038 1 VICE CHAIR EPPS: Here's what it is. 2 Working in a casino -- if you want to work in a 3 licensed or registration capacity -- is a 4 privilege, not a right. You don't 5 automatically get to do it. There's a 6 standard. You have to meet a test. You earn a 7 privilege to work in a casino. You can choose 8 to do that or not. So you don't ever have to 9 be involved in that process if you don't choose 10 to. If you choose to be involved in the 11 process, there's certain rules that go with the 12 choice that you make to be involved in that 13 process. 14 At some point you made a choice to be 15 involved in the process, and then you ran afoul 16 of some of the laws or rules. Then an 17 agreement was worked out where you could 18 maintain your ability to stay in that process, 19 but there are additional rules that you have to 20 follow because of what happened. You agreed 21 that, okay, I'm willing to go by those rules 22 and stay within the process. So you signed 23 that agreement. That agreement had attached 24 because you both agreed to it, and that's what 25 you agreed to. So that thing stays out there 0039 1 until it's resolved. You can't now say, well, 2 I'm not doing that anymore, so I don't want to 3 have to be bound by that agreement that I 4 entered into previously. You kind of -- you 5 agree to it. You've got to stick to it because 6 that's what you agreed to do. 7 Now, I understand your point. You're 8 saying that I don't work in the casino industry 9 anymore, and that's why I don't, every six 10 months, go right on time to pay my bill because 11 it doesn't impact my livelihood. I make the 12 payments because I have to to keep the job that 13 I have, but sending that notification to the 14 Division isn't in the front of my mind because 15 it doesn't impact my ability to keep the job 16 that I have. I understand all that. 17 But if what you're also saying is you 18 might want the opportunity to get a second job 19 in this industry, this industry has rules. And 20 that's part of that agreement that you attached 21 to. If you want back into that opportunity for 22 that part-time job, you got to stick to these 23 rules. And if what you're saying is true, you 24 only have a few more payments to make, just 25 make the payments. Put it on your calendar. 0040 1 Put a note on your refrigerator. Do something 2 to remind yourself that I just got to take this 3 stupid letter to these people and let them 4 know. It's not that hard of a task to give 5 yourself an opportunity to that you might want. 6 You're not doing it for us. You're doing it 7 for yourself. If you want that opportunity at 8 a part-time job or second opportunity, do 9 something stupid that will remind you to make 10 that simple gesture of sending them this 11 notice. It's not that onerous a burden on you. 12 I could see if they were telling you to 13 bring -- you know, carry your car in the hand 14 to your office or something. That's an 15 impossible task. You just got to bring a piece 16 of paper. It's not that hard a thing to do. 17 You know what I'm saying? 18 MR. RAGSDALE: I understand what you're 19 saying. 20 VICE CHAIR EPPS: If you want that 21 opportunity to get this part-time job or 22 something else that is in a privileged 23 environment, you got to go a little extra mile. 24 It's not like they're asking you for a pint of 25 blood. They're just asking you to bring a 0041 1 letter in. It's not that big a task, and it 2 isn't going to be that much longer. So stick 3 it out. Do what you got to do and give 4 yourself an opportunity to have different 5 avenues open to you in the future, if that's 6 what you want to do. Do you understand my 7 point? 8 MR. RAGSDALE: Yeah, I understand. It's 9 just kind of -- it's just been kind of tedious, 10 like. It's been years and years. I have a 11 five-year stipulation. I couldn't -- 12 VICE CHAIR EPPS: You know what? You're 13 a lot further along this path than you were. 14 You've got a lot less in front of you than you 15 have behind you. You've come this far. Why 16 mess it up now? Just do what you have to do. 17 MR. RAGSDALE: I understand. 18 CHAIR KASSEKERT: Commissioner 19 Sommeling, you have a question? 20 COMMISSIONER SOMMELING: The only 21 questions I have. You understand the 22 importance of the conferences when they're 23 scheduled of either going to the conference as 24 you're scheduled for or contact the Commission 25 and Division that you cannot make the 0042 1 conference for whatever reason; right? 2 MR. RAGSDALE: Right. 3 COMMISSIONER SOMMELING: Because I think 4 your last conference was scheduled -- was it 5 November? 6 MS. FRIGEN: November. And November 7 20th, I believe. 8 COMMISSIONER SOMMELING: November 20th 9 of '08. 10 MS. FRIGEN: Correct. 11 COMMISSIONER SOMMELING: Probably at 12 that conference could have explained this to 13 the Commission and the Division as to what had 14 happened prior to that and where you are and 15 where you want to go in acquiring your license 16 and meeting your obligations. The conferences 17 are important, and it's another way of you for 18 settling up, get everything behind you and get 19 it done. So you either have to go to the 20 conference or give them enough advance notice 21 with a good reason why maybe you can't make it 22 on a certain date. But at least go that far 23 and stay in touch. 24 VICE CHAIR EPPS: Madame Chair, I'm 25 going to move -- 0043 1 CHAIR KASSEKERT: Well, we haven't heard 2 from Mr. Armstrong yet. 3 MR. ARMSTRONG: Yes, thank you, Chair. 4 Basically, what I was saying when Miss 5 Brantley was in that seat that -- it sounds 6 kind of prophetic. I understand Mr. Ragsdale. 7 He can't be bothered complying with your order. 8 It's too much trouble to report to us every six 9 months. I think the argument is kind of 10 disingenuous, actually, because this case was 11 open, if my notes are correct, in November of 12 2007. And he's been invited to attend 13 conferences off and on over the past year. The 14 last one him not attending back in November. 15 He's had more than enough opportunity to come 16 and show us proof that he's in compliance with 17 the order. That's all he had to do. He 18 couldn't be bothered. 19 It's entirely your discretion whether or 20 not you want to remand this matter. But, you 21 know, this, to me, this -- this is an example 22 of the lack of respect for your order. Mr. 23 Ragsdale can't be bothered to comply with 24 the -- can't be bothered to comply with the 25 stipulation of settlement he agreed to. It's 0044 1 up to you. 2 VICE CHAIR EPPS: Madame Chair, I'm 3 going to -- 4 MR. RAGSDALE: It's not that. If you -- 5 CHAIR KASSEKERT: Mr. Ragsdale, I think 6 you're making your case worse, frankly. 7 MR. RAGSDALE: No. 8 CHAIR KASSEKERT: I mean, you've said 9 this is tedious. You know, I think Mr. 10 Armstrong's point's well taken, and if this 11 Commission decides to -- to vote to adjourn or 12 to vote to remand it, I think we are cutting 13 you an extremely large break. And if you're 14 not interested in at some point pursuing 15 employment, then get up and walk away now, and 16 don't put us through the whole process of doing 17 this. But if you are, then listen to what 18 Commissioner Epps said to you and comply. 19 Okay? 20 VICE CHAIR EPPS: Madame Chair, I'm 21 going to move to remand this one, also. 22 CHAIR KASSEKERT: Is there a second? 23 COMMISSIONER SOMMELING: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 0045 1 (Ayes.) 2 COMMISSIONER FEDORKO: No. 3 CHAIR KASSEKERT: Vote passes three to 4 one. 5 And I hope you listen to everything we 6 said to you today, and we're giving you really 7 what amounts not to even a second chance. 8 Because you've had second chances before. 9 Okay? 10 Thank you. 11 MS. FRIGEN: Thank you. Madame Chair, I 12 don't believe they are here, but let me verify 13 for the record is either Louis Dello-Russo 14 present or Jacqueline Rice? 15 (No response.) 16 MS. FRIGEN: Okay. Both of these 17 individuals have fallen out of compliance with 18 their licensure conditions, and they also 19 failed to attend conferences. Consequently, 20 these matters are brought to the Commission for 21 reconsideration today. 22 I would note that in addition to the 23 denial of the license applications, the denial 24 with respect to Jacqueline Rice would also 25 result in the revocation of her registration. 0046 1 CHAIR KASSEKERT: Thank you. 2 Mr. Armstrong? 3 MR. ARMSTRONG: Chair, we just ask that 4 you rescind your previous orders and deny these 5 folks licensure. 6 CHAIR KASSEKERT: Thank you. 7 Is there a motion? 8 VICE CHAIR EPPS: I move to rescind the 9 previous order and -- well, based on their 10 noncompliance with the conditions set forth in 11 the existing Commission orders and subsequent 12 failure to address their noncompliance issue 13 after having been afforded the opportunity to 14 do so. I move that we vacate the existing 15 orders, granting the license applications of 16 the referenced individuals, I guess that's C 17 and E. 18 MS. FRIGEN: Yes. 19 VICE CHAIR EPPS: And further pursuant 20 to Section 106(c) of the Act revoke the casino 21 service employment registration of Jacqueline 22 N. Rice. 23 CHAIR KASSEKERT: Is there a second? 24 COMMISSIONER SOMMELING: Second. 25 CHAIR KASSEKERT: The motion has been 0047 1 made and seconded. All in favor? 2 (Ayes.) 3 CHAIR KASSEKERT: Opposed? 4 (No response.) 5 CHAIR KASSEKERT: Motion carries. 6 Thank you. 7 MS. FRIGEN: Okay. 8 MR. ARMSTRONG: Thank you, 9 Commissioners. 10 MR. NANCE: Item No. 6, petition of 11 casino licensee to do business with Atronic 12 Americas, LLC, and Atronic International, GMBH, 13 nunc pro tunc; Adamar of New Jersey, Inc., 14 Resorts International Hotel, Inc.; and Trump 15 Marina Associates, LLC. 16 Miss Nagengast? 17 MS. NAGENGAST: Good morning, Chair and 18 Commissioners. 19 For your consideration are three 20 separate petitions filed by Atronic Americas, 21 LLC, and Atronic International GMBH, seeking 22 nunc pro tunc transactional waivers, one with 23 Tropicana, one with Resorts, and one with Trump 24 Marina. 25 Marie Jones is here on behalf of the 0048 1 Petitioners and Louis Rogacki on behalf of the 2 Commission. 3 CHAIR KASSEKERT: Thank you. 4 Good morning, Miss Jones. 5 MR. JONES: Good morning, Chair, 6 Commissioners. 7 Marie Jones from Fox Rothschild, here on 8 behalf of the Atronic entities. 9 These three petitions arise out of a 10 transaction whereby G Tech acquired in late 11 January of '08 fifty percent interest in 12 Atronic. 13 In connection with that transaction, we 14 filed appropriate transactional waiver 15 petitions. However, between the time in which 16 we filed the one -- the petitions and the 17 close, there was an additional lease entered 18 into with Resorts. That was inadvertently not 19 provided to us by Atronics. Their sales team 20 did not provide it to their compliance 21 department. 22 In addition there were two others in 23 March of '08, one a purchase with Tropicana, 24 and the other a lease with Trump Marina that 25 again the sales team did not provide it. 0049 1 When the compliance department found out 2 about this, they immediately notified me. I in 3 turn reported it to the Commission, Division 4 and filed these petitioners. 5 The -- Atronic has taken corrective 6 actions. They have reprimanded the sales team 7 members. They've also put in stronger controls 8 so that every transaction entered with Atlantic 9 City casinos go to the compliance department. 10 Again, these were inadvertent issues. 11 They weren't intentional noncompliance. 12 Thank you. 13 CHAIR KASSEKERT: Thank you. 14 Mr. Rogacki? 15 MR. ROGACKI: Chair, Commissioners, the 16 Division filed a letter on February 11, 2009, 17 recommending that the nunc pro tunc petitions 18 be ordered. The Division has concluded its 19 investigation surrounding the circumstances of 20 these three transactions. 21 I have had preliminary discussions with 22 Miss Jones about the ramifications with regard 23 to her client, and I will be speaking with the 24 casino -- respective casino counsel, and Miss 25 Jones and I will be speaking with Commission 0050 1 counsel with regard to how we move forward with 2 Atronics going forward. 3 CHAIR KASSEKERT: Thank you. 4 MR. ROGACKI: Thank you. 5 CHAIR KASSEKERT: Any questions? 6 COMMISSIONER SOMMELING: No questions, 7 Madame Chair. 8 VICE CHAIR EPPS: Madame Chair, I move 9 that we grant nunc pro tunc the three petitions 10 of Atronic Americas, LLC, and Atronic 11 International, GMBH, and the three casino 12 licensees and approve the transactional waivers 13 for the transactions as set forth in their 14 respective petitions without prejudice. 15 COMMISSIONER SOMMELING: Second. 16 CHAIR KASSEKERT: The motion has been 17 made and seconded. All in favor? 18 (Ayes.) 19 CHAIR KASSEKERT: Opposed? 20 (No response.) 21 CHAIR KASSEKERT: Motion carries. 22 Thank you. 23 MS. JONES: Thank you. 24 MR. NANCE: Item No. 7, petition of 25 Poker Tek, Inc., and Trump Plaza Associates, 0051 1 LLC, for extension of transactional waiver nunc 2 pro tunc. 3 Miss Nagengast? 4 MS. NAGENGAST: Chair, Commissioners, 5 for your consideration is another petition 6 seeking transactional waiver nunc pro tunc. 7 This time it's between Poker Tek and Trump 8 Plaza Associates. 9 CHAIR KASSEKERT: Thank you. 10 Good morning. 11 MR. CORVELEYN: Good morning, Chair, 12 Commissioners. Graig Corveleyn, Sterns & 13 Weinroth, appearing on behalf of Poker Tek. 14 Chair, this is the petition of Poker Tek 15 for approval of a transactional waiver nunc pro 16 tunc to September 3rd, 2008. Poker Tek was 17 originally granted its transactional waiver 18 which expired on the 3rd of September. 19 Inadvertently, there was not an extension 20 petition filed in a timely manner, and Poker 21 Tek was advised on the 4th of September that 22 the transactional waiver had expired. 23 Poker Tek then filed a motion -- rather 24 a petition immediately thereafter to have the 25 transactional waiver extended, but that 0052 1 transactional waiver was not re-extended until 2 October the 20th. So the petition seeks to 3 shore up, if you will, the period of time 4 between September the 4th, 2008, and October 5 the 20th when the new transactional waiver 6 was -- was issued by the Commission staff. 7 CHAIR KASSEKERT: Okay. Let me ask if 8 there are any questions before we hear from Mr. 9 Rogacki? 10 COMMISSIONER SOMMELING: I have no 11 questions, Madame Chair. 12 CHAIR KASSEKERT: Okay. 13 Commissioner Epps? 14 VICE CHAIR EPPS: Counsel, I have a 15 question. I read in the moving papers that 16 it's Poker Tek or your position that the delay 17 in the filing of the extension was somehow the 18 fault of the Commission. 19 MR. CORVELEYN: I think -- Commissioner 20 Epps, the issue was that when we received the 21 call on the 4th of September that the 22 transactional waiver had -- had expired, 23 basically it was Poker Tek's position we wanted 24 to remedy the situation right away. At that 25 time, I was instructed to file a petition that 0053 1 would -- that would grant that the 2 transactional waiver be covered for the two-day 3 period that, essentially, that they didn't have 4 a transactional waiver. I later learned that 5 that wasn't the correct position, that instead 6 we needed to file a new transactional waiver 7 petition because of the lapse. And I didn't 8 learn until later that -- that this particular 9 petition needed to be filed. So there was a 10 disconnect in communication, I think, between 11 my understanding of what petition needed to be 12 filed immediately and what -- and what actually 13 needed to occur. 14 VICE CHAIR EPPS: But, I read somewhere 15 that you seem to suggest that you didn't know 16 when the transactional waiver would start and 17 end or something? But the order specifically 18 said that the waiver would end on September 19 3rd. So I don't understand how when it started 20 and ended impacted when you had to file for the 21 extension. The extensions are filed prior to 22 the termination of the first transactional 23 waiver if you need to go beyond it. 24 MR. CORVELEYN: Correct. And -- and 25 we're saying that the issue as to when the 0054 1 transactional waiver started and ended wasn't 2 necessarily the crux of the argument. It was 3 that the -- that the termination or the 4 expiration of the transactional waiver was 5 inadvertent, and that immediately afterwards, 6 Poker Tek took the correct steps to try to 7 remedy that situation. 8 VICE CHAIR EPPS: But I don't see how 9 the Commission somehow missed the ball or let 10 you down in this matter. 11 MR. CORVELEYN: No. No. That's not 12 what's being argued, Commissioner. 13 VICE CHAIR EPPS: That seemed to be 14 asserted in your papers, that it was staff's 15 fault that you didn't -- 16 MR. CORVELEYN: No. No. No. What 17 we're arguing is that in an explanation as to 18 why this is arguably excusable neglect is that 19 Poker Tek's initial steps to remedy the 20 expiration issue of the transactional waiver 21 were guided by the Commission. There -- there 22 was a miscommunication between ourselves and 23 the Commission as to what needed to be filed. 24 So initially the first petition that was filed 25 on the 5th, just two days after it expired, was 0055 1 not correct. And I didn't learn that until 2 much later. 3 COMMISSIONER FEDORKO: A 4 miscommunication on whose part? 5 MR. CORVELEYN: Miscommunication as 6 to -- as to -- on Poker Tek's fault. On Poker 7 Tek's position in that we weren't sure what it 8 was that needed to be filed. And, hence, the 9 petition that we filed initially was incorrect. 10 But I didn't learn that until much -- I didn't 11 learn that until much later. 12 COMMISSIONER FEDORKO: Why? 13 MR. CORVELEYN: Because I didn't get 14 contacted by Commission that said that this 15 wasn't the right petition to file, you need to 16 file this instead, until a couple weeks later. 17 COMMISSIONER FEDORKO: Why didn't you 18 call the Commission? 19 MR. CORVELEYN: Because I didn't -- the 20 Commission didn't contact me until a couple 21 weeks later to say that this wasn't the correct 22 petition. I thought that the petition I had 23 filed on the 5th was going forward. 24 VICE CHAIR EPPS: Okay. I read your 25 papers to explain things a lot differently, but 0056 1 it doesn't matter now. I just didn't 2 understand your representation to staff had 3 somehow failed this process. 4 CHAIR KASSEKERT: Mr. Rogacki? 5 MR. ROGACKI: The Division also filed a 6 letter on this matter on February 11th, 2009. 7 We asked that this petition be granted nunc pro 8 tunc. We also, once the correct filing was 9 made, I believe mid to late October, the 10 Division -- the Division concurred in that 11 filing being -- the transactional waiver being 12 granted. 13 It's my understanding that the game is 14 not on the casino floor anymore at this time. 15 So it's our position that the nunc pro tunc can 16 be issued and granted without prejudice. And I 17 will be having discussions with counsel and 18 counsel from the casino in the near future with 19 regard to any civil penalty that may result 20 with regard to this transaction. 21 CHAIR KASSEKERT: Thank you. 22 Any other questions? 23 VICE CHAIR EPPS: Madame Chair, I move 24 that we grant nunc pro tunc the joint petition 25 of Poker Tek, Inc., and Trump Plaza Associates, 0057 1 LLC, and approve a transactional waiver from 2 September 4, 2008, through October 19, 2008, 3 without prejudice. 4 COMMISSIONER SOMMELING: 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. 12 MR. CORVELEYN: Thank you. 13 MR. NANCE: Item No. 8, petition of 14 Aristocrat International PTY., LTD., Aristocrat 15 Technologies Australia PTY., LTD., and 16 Aristocrat Technologies, Inc, for waiver of 17 qualification. 18 Miss Nagengast? 19 MS. NAGENGAST: Chair, Commissioners, 20 for your consideration is the petition of the 21 various Aristocrat companies seeking a waiver 22 of qualification for a number of their 23 qualifiers. 24 They also have asked for a sealing 25 request of two particular paragraphs in their 0058 1 petition. 2 Pat Madamba is here on behalf of the 3 Petitioners and Louis Rogacki on behalf of the 4 Division. 5 CHAIR KASSEKERT: Thank you. 6 Mr. Madamba, good morning. 7 MR. MADAMBA: Good morning, Madame 8 Chair. Pat Madamba from the law firm of Fox 9 Rothschild on behalf of the Aristocrat, 10 International PTY., LTD., Aristocrat 11 Technologies Australia, and Aristocrat 12 Technologies, Inc. I'm going to be brief 13 unless you have any questions. 14 A similar matter was on your agenda 15 approximately ten years ago. At that time -- 16 at that time the Ainsworth family held 17 approximately 52 percent of the publicly traded 18 entity holding company. Since then -- and they 19 were looking for a waiver of the 52 percent, 20 and the Commission correctly denied that 21 waiver. Since then, there's been a number of 22 material changes in the position and, most 23 importantly, that several of the Ainsworth 24 family members, those that hold five percent or 25 more have been found qualified. The 52 percent 0059 1 has been reduced to 31 percent. Of that 2 amount, of the 31 percent -- and I'm going to 3 use this for the basis number so I'm comparing 4 apples to apples. Of that 31 percent, the 5 Ainsworth family members that hold 21 -- 6 approximately 21, 22 percent of that amount 7 have all been found qualified. So what we're 8 actually dealing with is either a determination 9 of the seven family members that hold 90 10 percent in the aggregate can be waived, and of 11 that 90 percent, it's actually reduced further 12 because one, two percent of that is held by a 13 Trust by the Estate, the trustee of that Estate 14 is someone that's qualified. So now we're 15 dealing with seven percent. 16 We would ask that their holdings not be 17 aggregated, and no useful purpose would be 18 served by aggregating that. They've entered 19 into deed polls a number of years ago, 20 approximately ten years ago, that where they've 21 given up their right to vote their shares on 22 anything but extraordinary matters. 23 And similar to a limited partner, the 24 Commission has, for instance, the hold-co, 25 vote-co structure has waived limited partners 0060 1 previously. 2 In addition, again as I said, the bulk 3 of the folks here that hold this percentage 4 have now been found qualified by the 5 Commission, and that's really the crux, the 6 real difference between ten years ago and 7 today, is that the people that hold the vast 8 majority of shares have been found qualified by 9 the Commission. And what we're really dealing 10 with then is several other Ainsworth family 11 members that hold significantly less than five 12 percent. And we're asking that you either 13 determine that they're not qualifiers because 14 they're under five percent, or if you decide to 15 aggregate, that you waive them because they 16 have no ability to control either the publicly 17 traded holding company or the CSI. 18 Thank you. 19 CHAIR KASSEKERT: Thank you. 20 Mr. Rogacki? 21 MR. ROGACKI: Madame Chair, 22 Commissioners, the Division filed its letter 23 responding to this petition on January 26th. 24 We recommend that the petition be granted. 25 I'm happy to hear Counsel state that the 0061 1 Division was right in opposing this petition 2 ten years ago. I'm glad Mr. Adams is here to 3 hear that. 4 (Laughter.) 5 CHAIR KASSEKERT: Don't hold a grudge 6 there. 7 (Laughter.) 8 MR. ROGACKI: The Division has changed 9 its position with regard to these individuals 10 in this situation because we believe that 11 circumstances have changed when the petition 12 was reviewed ten years ago. There were 13 circumstances surrounding the application 14 before the Division and the Commission which we 15 believe -- and that was why attached to the 16 Division's response this time was the 17 Division's response in '99 so that the 18 Commission had a flavor for the circumstances 19 we were looking at back in '99 and why we felt 20 that none of the individuals could be waived. 21 We don't believe any of those 22 circumstances exist anymore. We agree with 23 Counsel that the individuals that they are 24 asking to be waived all hold under five 25 percent. As a result, just for the record, 0062 1 because all those individuals hold under five 2 percent, we did not address the deed poll 3 issue. The Division still remains opposed to 4 using the deed poll mechanism as a way to avoid 5 qualification, and I'll leave it at that. 6 We believe this petition can be granted. 7 CHAIR KASSEKERT: Thank you. 8 MR. ROGACKI: Thank you. 9 CHAIR KASSEKERT: Let me be -- before I 10 ask the Commissioners fro any questions with 11 respect to the petition, is there any objection 12 to the sealing request made by -- 13 MR. ROGACKI: No. 14 CHAIR KASSEKERT: Okay. All right. 15 Let me ask if any of the Commissioners 16 have any questions. 17 COMMISSIONER SOMMELING: No questions, 18 Madame Chair. 19 CHAIR KASSEKERT: Okay. We would need a 20 motion first to grant the sealing request. 21 COMMISSIONER FEDORKO: Motion. 22 COMMISSIONER SOMMELING: Second. 23 CHAIR KASSEKERT: The motion has been 24 made and seconded to seal Paragraphs 13 and 18 25 of the instant petition. 0063 1 All in favor? 2 (Ayes.) 3 CHAIR KASSEKERT: Opposed? 4 (No response.) 5 CHAIR KASSEKERT: The motion carries. 6 And now the second part. 7 COMMISSIONER SOMMELING: Madame Chair -- 8 VICE CHAIR EPPS: Go ahead. 9 COMMISSIONER SOMMELING: Madame Chair, I 10 move to grant the petition of the Aristocrat 11 International PTY., LTD., Aristocrat 12 Technologies Australia, PTY., LTD., and 13 Aristocrat Technologies, Incorporated, and 14 waive of qualification for H. Mark Ainsworth, 15 Christian J. H. Ainsworth, the Estate of 16 Elizabeth Ainsworth, Stephen J. H. Ainsworth, 17 Nanette Ainsworth, Peter Buchanan Ainsworth, 18 and Jessie Ainsworth, and Valerie Antoinette on 19 the basis that they lack the ability to control 20 the Petitioners in connection with the current 21 gaming-related CSI licenses of the Petitioners. 22 CHAIR KASSEKERT: Is there a second? 23 VICE CHAIR EPPS: Second. 24 CHAIR KASSEKERT: Motion is made and 25 seconded. This is a roll call vote. 0064 1 MR. NANCE: Commissioner Fedorko? 2 COMMISSIONER FEDORKO: Yes. 3 MR. NANCE: Commissioner Sommeling? 4 COMMISSIONER SOMMELING: Yes. 5 MR. NANCE: Vice Chair Epps? 6 VICE CHAIR EPPS: Yes. 7 MR. NANCE: Chair Kassekert? 8 CHAIR KASSEKERT: Yes. 9 MR. NANCE: The record will reflect that 10 the motion is unanimous. 11 CHAIR KASSEKERT: Thank you. 12 MS. NAGENGAST: Thank you. 13 MR. ROGACKI: Thank you. 14 MR. NANCE: Item No. 9, consideration of 15 the qualification of John McManus to serve as 16 Senior Vice President, Assistant General 17 Counsel, and Assistant Secretary of the MGM 18 MIRAGE and Assistant Secretary of MAC, CORP. 19 Miss Richardson? 20 MS. RICHARDSON: Good morning, Chair and 21 Commissioners. 22 A draft resolution on the qualification 23 of John McManus has been circulated to the 24 parties. 25 Appearing for Petitioner is Marie Jones, 0065 1 and for the Division is DAG Jim Fogarty. 2 CHAIR KASSEKERT: Thank you. 3 Good morning, Miss Jones. 4 MS. JONES: Good morning, again. 5 We've reviewed the draft resolution and 6 urge to you adopt it. 7 Thank you. 8 CHAIR KASSEKERT: Thank you. 9 Mr. Fogarty? 10 MR. FOGARTY: Good morning. 11 Mr. McManus seeks qualification under 12 the Act as MGM MIRAGE's Senior Vice President, 13 Assistant General Counsel, and I think there's 14 another position. 15 MS. JONES: Assistant Secretary. 16 CHAIR KASSEKERT: Secretary. 17 MR. FOGARTY: Assistant Secretary. And 18 also Assistant Secretary of MAC, CORP, which is 19 an intermediary holding company. 20 We have filed a letter report with you 21 dated May 19, 2009, and recommend that you 22 qualify him in that position. 23 I've seen the draft resolution and have 24 no objection to its entry. 25 CHAIR KASSEKERT: Thank you. 0066 1 Any questions? 2 COMMISSIONER SOMMELING: No questions, 3 Madame Chair. 4 COMMISSIONER FEDORKO: Motion to adopt 5 the draft resolution and find John McManus 6 qualified to serve as Senior Vice President and 7 Assistant General Counsel and Assistant 8 Secretary of MGM MIRAGE and Assistant Secretary 9 of MAC, CORP. 10 COMMISSIONER SOMMELING: Second. 11 CHAIR KASSEKERT: The motion is made and 12 seconded. This is a roll call vote. 13 MR. NANCE: Commissioner Fedorko? 14 COMMISSIONER FEDORKO: Yes. 15 MR. NANCE: Commissioner Sommeling? 16 COMMISSIONER SOMMELING: Yes. 17 MR. NANCE: Vice Chair Epps? 18 VICE CHAIR EPPS: Yes. 19 MR. NANCE: Chair Kassekert? 20 CHAIR KASSEKERT: Yes. 21 MR. NANCE: The record will reflect that 22 the motion is unanimous. 23 MS. JONES: Thank you. 24 MR. FOGARTY: Thank you. 25 MR. NANCE: Item No. 10, petition of 0067 1 Harrah's Entertainment, Inc., and Harrah's 2 Operating Company, Inc., for approval of an 3 exchange offer and other relief. 4 Miss Wozniak? 5 MS. WOZNIAK: Good morning, Chair, 6 Commissioners. 7 You have a draft -- revised draft 8 resolution dated March 16th, '09, which I have 9 distributed to the parties as well. 10 Mr. O'Gara is here on behalf of the 11 Petitioners and Dorothy Turi for the Division. 12 CHAIR KASSEKERT: Thank you. 13 Good morning, Mr. O'Gara. 14 MR. O'GARA: Good morning. 15 Oh, I should say something. 16 COMMISSIONER FEDORKO: That's the way it 17 works. Yes. 18 VICE CHAIR EPPS: That would be helpful. 19 COMMISSIONER SOMMELING: That would be 20 helpful. 21 MR. O'GARA: Chair, members of the 22 Commission. This is a petition that seeks the 23 required approval for an exchange offer to 24 enable Harrah's Operating Company to exchange 25 existing unsecured debt for new notes that are 0068 1 secured by a second lien on the HOC properties. 2 And for a frame of reference, in Atlantic City, 3 that's everything except Marina Associates, 4 Harrah's Marina, Corp., which is the CMBS 5 financing, that matures in 2018. It's 6 remarkably similar to the exchange offer that 7 this Commission approved and was conducted last 8 December. 9 While it has those same substantial 10 similarities, there are two -- two additional 11 features, which I think are unique to this one. 12 The first is that a subsidiary of HET, Harrah's 13 Entertainment, will also conduct an offer to 14 purchase up to $225 million of certain of the 15 outstanding HOC notes. At a substantial 16 discount. That will use AGT cash. It doesn't 17 affect at all the liquidity or the balance 18 sheet of HOC. And, finally, simultaneously 19 with this offer, the sponsors -- and that's a 20 term we use for sponsors and co-investors, 21 meaning TPG Capital, Apollo Worldwide, and some 22 of the co-investors -- will make a cash offer 23 to buy some of these second priority notes from 24 the people who've changed. That offers to 25 these note holders the option to cash out of 0069 1 the instrument rather than have the new second 2 priority note. And that price will be at 370 3 per thousand, to give you an idea of the 4 discount. 5 That involves nothing involving any AGT 6 cash or HOC cash. That is cash that comes from 7 other sources and the sponsors. 8 And, finally, within this there's a 9 consent solicitation through the holders of the 10 notes to eliminate certain covenants that exist 11 in the notes that's being conducted 12 simultaneously. 13 The exchange offer is the first -- 14 there's a term for this. The early exchange 15 is -- commences today, the 18th. And then it 16 runs through, I believe, April 18th with 17 provision to extend it. Assuming successful 18 exchange offer and the related tenders, it 19 extends the near-term maturities of the notes 20 and takes out the possibility of, as you get 21 closer, the difficulty of refinancing of HOC 22 notes. And that gives them more flexibility in 23 the capital markets, whatever they may be. It 24 reduces the debt burden by approximately 1.5 25 billion aggravate base amount, and the 0070 1 reduction in annual interest expenses, $55 2 million a year which, of course, drops the 3 operating cash flow for HOC. 4 Certainly, if you have any questions, 5 we'll try to answer them if I can. 6 CHAIR KASSEKERT: Thank you, Mr. O'Gara. 7 MR. O'GARA: Oh, one other thing I 8 should say. 9 For those of you who read the Business 10 Wire and the internet, last night there was a 11 release from Harrah's which is an amendment to 12 the exchange offer. It's not an amendment in 13 the sense that it amends anything. Yesterday 14 Harrah's issued their 10K. And there's events 15 in that 10K which when disclosed in the 10K 16 have to be disclosed to the people who are 17 going to attend. It's the infamous ratings 18 downgrade. And so that was put in so that when 19 the 10K went out, so it looks just like the 20 tender offer with the same legends on the top, 21 but it just discloses information. Doesn't 22 change the terms of the offer. 23 CHAIR KASSEKERT: Okay. Let me ask if 24 anyone has any questions before we hear from 25 the Division? 0071 1 COMMISSIONER SOMMELING: No questions, 2 Madame Chair. 3 CHAIR KASSEKERT: Hear from the Division 4 first? 5 Miss Turi? 6 MS. TURI: Yes. Madame Chair, thank 7 you. 8 First of all, we'd like to thank Mr. 9 O'Gara for providing the information to us as 10 early as possible, which was this morning, and 11 we've had an opportunity to review -- although 12 not deeply analyze, but in this instance at 13 least review the information provided to us in 14 that -- in that new offering memoranda. And we 15 don't feel that it is going to impact the 16 offering as it stands at this point. 17 We look forward to Mr. O'Gara and 18 Petitioners providing such information to us on 19 a forward-going basis, as they have been doing, 20 as soon as possible, and reserve the right as 21 we do have to review and analyze any of this 22 information that comes to us on a going-forward 23 basis both during the time that the offering is 24 outstanding as well as after the offering is 25 consummated. 0072 1 Subject to the conditions that we've 2 seen in the resolution as it's presented, we 3 recommend that the Commission approve the 4 exchange offering as it's being put forward to 5 you at this time. 6 CHAIR KASSEKERT: Thank you. 7 Let me ask if any of the Commissioners 8 can have any questions? 9 Commissioners Epps? 10 VICE CHAIR EPPS: Well, I do. Mr. 11 O'Gara, I just want you to know that I'm going 12 to put you on your resume as my MBA professor, 13 because sitting here in the last few years I -- 14 (Laughter.) 15 MR. O'GARA: I wouldn't be looking for a 16 job based on that. But, yeah. Good luck. 17 (Laughter.) 18 VICE CHAIR EPPS: I've gained so much 19 enlightenment in this area that I wouldn't 20 otherwise have. 21 But assuming I understand this 22 correctly, these exchange offers allow Harrah's 23 certain flexibilities if they're all -- 24 MR. O'GARA: The point -- they do two 25 things, I think, essentially. Number one, they 0073 1 reduce the aggregate amount of debt. You know, 2 when you buy these -- the exchanges are 3 obviously on ratios. And I don't think anybody 4 thinks here they're exchanging dollar for 5 dollar. You can see it from the cash, 37 cents 6 on the dollar. On -- or on the tender from the 7 sponsors. On the portion that you see where 8 the AGT sister sub to HOC is tendering, you saw 9 the numbers there. They're fairly low. But 10 they reflect the trading levels of the debt. 11 They take the aggregate indebtedness. What's 12 important -- more importantly, what they do is 13 they reduce the debt service so it drops the 14 operating income so that you can match up 15 against the 13 percent decline in revenue 16 that's going on. 17 You know, obviously, these are all 18 modeled based upon one model. The worst-case 19 scenario of that model is probably somewhere 20 above where we are now, so it's an attempt to 21 do that. 22 And also if you take out on the 23 maturities, further, Commissioners, you avoid 24 this kind of collision with the one issue 25 that's out there for so much, and it doesn't 0074 1 seem like so much, but you can't refund it, and 2 then the cascade starts. That's exactly what 3 people are attempting to do here. 4 VICE CHAIR EPPS: That's not fair. You 5 answered my question before I finished asking, 6 because that was kind of the first question. 7 (Laughter.) 8 VICE CHAIR EPPS: The second question 9 is, all of this anticipates a successful 10 process. But what happens if not as many 11 people engage in the offer -- 12 MR. O'GARA: Oh. 13 VICE CHAIR EPPS: -- as anticipated? 14 Where do you -- can you talk about that a 15 little bit? 16 MR. O'GARA: You don't get the -- yeah. 17 You don't get the baby. You don't get the 18 result that you achieve. But to whatever 19 degree, as long as the economics make sense -- 20 in other words, you look at it, and clearly 21 what's being sought here is the tender -- you 22 can see it from the pricing -- of some over 23 other notes. I mean, near-term maturities, 24 they pay more. As long as you get what, in the 25 judgment of the people who in the end have to 0075 1 pull the trigger, is enough that the reduction 2 makes sense against the cost, you accept. If, 3 in fact, you know -- I think you see this, and 4 you've seen it with others. Not here in New 5 Jersey, but I think you've read about a couple 6 in Nevada, the Stations the most obvious, where 7 the tender goes out and comes back, you know, 8 11 percent. You know, then you have to say it, 9 hold it. That's not what the marketplace 10 wants. The thought here is that the other 11 exchange was successful. 12 There's two elements here which I think 13 are different and which increase its 14 attractiveness. One is, rather than tender for 15 some pieces out there, there's a cash offer to 16 just take them out because they're not that 17 large. And the second is, even for those 18 tendering the notes, there's a liquidity 19 option. There's going to be 350 million. If 20 that -- if you want 37, you can take it, and it 21 will come from the sponsors. And that, 22 obviously -- well, it works in their interest 23 because they own all the equity. Certainly 24 works in the interest -- and you try to keep 25 reducing this to meet the factors. Ultimately 0076 1 does it work? Hopefully, it does. 2 VICE CHAIR EPPS: Okay. And I guess my 3 other question is, I guess -- and I guess we 4 wouldn't be here if we weren't -- but we're 5 reasonably optimistic that the environment is 6 ripe for such an offering and folks are 7 interested in -- 8 MR. O'GARA: Hopeful. 9 VICE CHAIR EPPS: -- jumping in the 10 game. 11 MR. O'GARA: Hopeful. Yeah. They're 12 hopeful. I mean, I don't think that anyone 13 makes these offers unless they believe they 14 have some reasonable likelihood of some 15 success. I mean, there's no guarantee. But, 16 certainly, if you look at it and say, God, this 17 is a real stinker. Nobody's going to buy this. 18 You're not going to put it out there, because 19 it just takes away your flexibility for -- 20 VICE CHAIR EPPS: Okay. 21 MR. O'GARA: All right? 22 CHAIR KASSEKERT: Mr. Fedorko, any 23 questions? 24 MR. O'GARA: One other thing, Chair. 25 There's a sealing request in conjunction 0077 1 with this, and its simply forecast numbers. I 2 don't think there's any -- I don't think 3 there's anything -- anybody commented about it. 4 Just some numbers that came out of forecast. 5 CHAIR KASSEKERT: Any objection? 6 MS. TURI: Yeah. We have no objection 7 to the sealing request of the numbers. 8 CHAIR KASSEKERT: Okay. Thank you, Miss 9 Turi. 10 Let me ask for a motion first to accept 11 the sealing request. 12 VICE CHAIR EPPS: Move that we accept 13 the sealing request. 14 COMMISSIONER SOMMELING: Second. 15 CHAIR KASSEKERT: The motion has been 16 made and seconded. All in favor? 17 (Ayes.) 18 CHAIR KASSEKERT: Opposed? 19 (No response.) 20 CHAIR KASSEKERT: Motion carries. 21 VICE CHAIR EPPS: Madame Chair, I move 22 that we adopt the draft resolution and grant 23 the requested relief to the extent set forth 24 and subject to the conditions therein and: 25 A, approve the issuance of the new notes 0078 1 by HOC and the exchange offer; 2 And, B, find that casino licensees 3 Showboat, Harrah's, Bally's, and BRC and their 4 holding and intermediary companies, will 5 continue to meet the financial stability 6 standards set forth in the Act and NJAC 7 19:43-4. 8 COMMISSIONER SOMMELING: Second. 9 CHAIR KASSEKERT: Motion is made and 10 seconded. This is a roll call vote. 11 MR. NANCE: Commissioner Fedorko? 12 COMMISSIONER FEDORKO: Yes. 13 MR. NANCE: Commissioner Sommeling? 14 COMMISSIONER SOMMELING: Yes. 15 MR. NANCE: Vice Chair Epps? 16 VICE CHAIR EPPS: 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. O'GARA: Thank you. 23 MS. TURI: Thank you. 24 MR. NANCE: Item No. 11, proposed 25 readoption of NJAC 19:48. 0079 1 Ms. Frank? 2 MS. FRANK: Good morning, Chair and 3 Commissioners. 4 The rules on exclusion of persons are 5 before you today for the Notice of Readoption. 6 Because there are no changes in the language 7 between the proposed Readoption Notice and this 8 one, the notice will become effective upon 9 filing with the Office of Administrative Law 10 tomorrow. 11 CHAIR KASSEKERT: Thank you. 12 Any questions for Miss Frank? 13 COMMISSIONER SOMMELING: Madame Chair, 14 move to approve for publication the proposed 15 readoption without change. 16 COMMISSIONER FEDORKO: Second. 17 VICE CHAIR EPPS: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. All in favor? 20 (Ayes.) 21 CHAIR KASSEKERT: Opposed? 22 (No response.) 23 CHAIR KASSEKERT: Motion carries. 24 Thank you. 25 MS. FRANK: Thank you. 0080 1 MR. NANCE: Item No. 12, petition of 2 Boardwalk Regency Corporation to amend its 3 operation certificate and related relief. 4 MR. MONCRIEF: Good morning, Madame 5 Chair and members of the Commission. 6 MR. NANCE: Mr. Moncrief? 7 MR. MONCRIEF: A draft resolution has 8 been circulated. 9 Here for the Petitioner is Tim Lowry, 10 and for the Division, Tim Ficchi. 11 CHAIR KASSEKERT: Mr. Lowry, good 12 morning. 13 MR. LOWRY: Good morning, Madame Chair, 14 Commissioners. 15 Caesars is trying to capitalize on the 16 nightclub entertainment scene by introducing a 17 branded three-story, 20,000 foot nightclub 18 which is proximate to the boardwalk. We just 19 need to reconfigure some of our gaming floor 20 space, take away some of our casino space, and 21 take away some of our simulcast space to do 22 that. We hope that will be just another "pop" 23 to keep Caesars going. 24 We've reviewed the draft resolution and 25 have no objections. 0081 1 CHAIR KASSEKERT: Thank you. 2 Any questions for Mr. Lowry? 3 COMMISSIONER FEDORKO: What's a "pop"? 4 MR. LOWRY: Pop. It's that wow factor 5 that takes your business to the next level. 6 COMMISSIONER FEDORKO: Oh, okay. 7 Thank you. 8 CHAIR KASSEKERT: Mr. Ficchi? 9 COMMISSIONER FEDORKO: That's a legal 10 term; right? 11 (Laughter.) 12 MR. LOWRY: Black's Law Dictionary, I 13 think. Seventh edition. 14 MR. FICCHI: Good morning, Madame Chair, 15 Commissioners. 16 The Division has reviewed this matter 17 and reviewed the draft resolution, and we have 18 no objection to the adoption of it. 19 Thank you. 20 CHAIR KASSEKERT: Thank you. 21 Any questions? 22 COMMISSIONER SOMMELING: No questions, 23 Madame Chair. 24 VICE CHAIR EPPS: Come on, Pop. 25 CHAIR KASSEKERT: Yeah. Come on, Pop. 0082 1 COMMISSIONER FEDORKO: Motion to adopt 2 the draft resolution and approve the petition 3 of Boardwalk Regency Corporation for an 4 amendment to its certificate of operation and 5 CHAB license to permit the reconfiguration of 6 its gaming floor subject to the conditions in 7 the resolution. 8 VICE CHAIR EPPS: 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: Motion carries. 15 MR. LOWRY: Thank you. 16 MR. MONCRIEF: Thank you. 17 MR. FICCHI: Thank you. 18 MR. NANCE: Item No. 13, petition of the 19 Trustee and Conservator for Adamar of New 20 Jersey, Inc., to modify financial reporting 21 procedures. 22 Miss Richardson? 23 MS. RICHARDSON: Chair, Commissioners, 24 you have a revised draft resolution on this 25 matter that was also circulated to the parties. 0083 1 Appearing for Petitioner is Sean Mack, 2 and for the Division is DAG Mary Jo Flaherty. 3 CHAIR KASSEKERT: Good morning, Mr. 4 Mack. 5 MR. MACK: Good morning, Chair, 6 Commissioners. 7 Our petition is really just to modify 8 the existing financial reporting requirements 9 so they can be consistent with the bankruptcy 10 financial requirements and to avoid the 11 duplication of that burden on the casino staff. 12 We have a sealing request with respect 13 to the exhibit. We're asking if the first two 14 pages, which contain financial forecasts, be 15 sealed. The third page, which was -- just 16 reflects an analysis of the professional fees, 17 how that are to be reported, we're not asking 18 that that be sealed. 19 We've reviewed the draft petition -- or 20 the draft resolution, and we urge you to adopt 21 it. 22 CHAIR KASSEKERT: Thank you. 23 Ms. Flaherty? Good morning. 24 MS. FLAHERTY: Good morning, Chair, 25 Commissioners. 0084 1 The Division submitted a letter report 2 dated March 10th, 2009, with regard to this 3 matter. And, as stated by Mr. Mack, this has 4 to do with the adjusting the monitoring, the 5 financial reporting requirements with regard to 6 the conditions upon Adamar, Tropicana. 7 The conditions are not effected in terms 8 of the $19 million condition which, as you 9 know, has been very important to us in terms of 10 the continuing operation of Tropicana. 11 We have no objection to the sealing 12 request. Our position is premised upon the 13 continuation of the $19 million cash reserve 14 requirement and compliance with it. 15 We conducted tests with regard to this 16 matter in terms of historical information that 17 was submitted as well as for the last couple 18 week period in terms of how the information -- 19 according to what the actual operation results 20 were. And as a result of that, there were only 21 very minor variances noted. As a result of 22 that, we have no objection to the request by 23 Mr. Mack. 24 We've had the opportunity to review the 25 draft resolution, and we support that. 0085 1 And I want to thank you Miss Richardson 2 for all the work that she did on that and 3 moving forward with regard to that and putting 4 it together for us. 5 Thank you. 6 CHAIR KASSEKERT: Thank you. 7 Any questions? 8 COMMISSIONER SOMMELING: I have no 9 questions, Madame Chair. 10 VICE CHAIR EPPS: Madame Chair -- 11 CHAIR KASSEKERT: Why don't we do the 12 sealing request first. 13 VICE CHAIR EPPS: Oh, okay. 14 CHAIR KASSEKERT: Want to move for the 15 sealing request? 16 VICE CHAIR EPPS: I move we approve the 17 sealing request. 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 VICE CHAIR EPPS: I was going to say 0086 1 that was the financial -- the financial 2 Division, the financial groups of both of the 3 Division and the Commission that were concerned 4 about this condition, and inasmuch as the 5 Division has expressed that they're okay with 6 this change, that I am okay because it was 7 their work that had to be done. And if they're 8 okay with it, then I would move that we adopt 9 the draft resolution and grant the relief 10 requested in the petition to the extent set 11 forth in the findings and subject to the 12 conditions in the resolution. 13 COMMISSIONER SOMMELING: Second. 14 CHAIR KASSEKERT: The motion has been 15 made and seconded. All in favor? 16 (Ayes.) 17 CHAIR KASSEKERT: Opposed? 18 (No response.) 19 CHAIR KASSEKERT: Motion carries. 20 MS. FLAHERTY: Thank you. 21 MR. NANCE: Item No. 14, petition of the 22 Trustee and Conservator of Adamar of New 23 Jersey, Inc., to modify CCC Order No. 24 08-06-30-1 with regard to the engagement 25 agreement with Moelis & Company, LLC; and 0087 1 petition of JP Morgan Securities, Inc., for 2 relief from certain provisions of CCC Order No. 3 08-06-30-1 requiring the Petitioner to file a 4 completed nongaming CSI license application. 5 Miss Richardson? 6 MS. RICHARDSON: Chair and 7 Commissioners, a draft resolution was also 8 circulated to the parties in this matter. 9 And again for Petitioner is Sean Mack, 10 and for the Division is DAG Mary Jo Flaherty. 11 CHAIR KASSEKERT: It's actually Jack 12 Adams. 13 (Laughter.) 14 MS. RICHARDSON: I'm sorry. 15 CHAIR KASSEKERT: But the resemblance 16 is very -- 17 MS. RICHARDSON: Oh, sorry. Sorry. 18 CHAIR KASSEKERT: Mr. Mack? 19 MR. MACK: Chair, Commissioners, you'll 20 recall last summer we -- you granted our 21 petition to retain both JP Morgan and Moelis as 22 co-brokers subject to various conditions. Over 23 the course of last nine months or so, JP Morgan 24 has decided they're not going to pursue that 25 request. They've failed their motion to be 0088 1 relieved of their obligations. And what we're 2 just seeking to do here is to just -- the pot 3 of the fee that will be paid to the brokers had 4 been -- was going to be split between two 5 firms. And now we're just asking is since 6 Morgan is going to be out, that Moelis receive 7 the whole fee. 8 We've reviewed the draft resolution. On 9 behalf of Justice Stein, we urge it be 10 accepted. I can also represent to you that 11 I've spoken with Rick DeLucry who represents JP 12 Morgan in this matter, that reviewed the draft 13 resolution, and also urge that it be accepted. 14 CHAIR KASSEKERT: Thank you. 15 Mr. Adams? 16 MR. ADAMS: Good morning, Chair and 17 Commissioners. 18 We filed letter reports in response to 19 both petitions, recommended certain conditions. 20 They've been put forth in the proposed 21 resolution which we have reviewed, and we have 22 no objection to the entry of that. 23 If you have any questions, I'd be happy 24 to answer them. 25 CHAIR KASSEKERT: Thank you. 0089 1 Any questions? 2 COMMISSIONER SOMMELING: Madame Chair, 3 move to adopt the draft resolution and grant 4 the requested relief in the petition subject to 5 the conditions in the resolution. 6 VICE CHAIR EPPS: 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 MR. NANCE: For your consideration, Item 14 No. 16, petition of the Trustee and Conservator 15 for Adamar of New Jersey, Inc., to extend the 16 sales period. 17 Mr. DiGiacomo? 18 MR. DiGIACOMO: Chair, Commissioners. 19 Good morning. 20 If Counsel could place their appearances 21 on the record, please. 22 MR. MACK: Sean Mack for the Trustee and 23 Conservator. 24 CHAIR KASSEKERT: I think we -- we're 25 doing 16 or 15? 0090 1 MR. DiGIACOMO: Sixteen, I believe. 2 CHAIR KASSEKERT: Sixteen. 3 Mr. O'Gara? 4 MR. ADAMS: Jack Adams for the Division 5 of Gaming Enforcement. 6 CHAIR KASSEKERT: Mr. Oettle? 7 MR. DiGIACOMO: I don't believe that -- 8 obviously, Mr. Oettle can speak on behalf of 9 himself and his client, but I don't think 10 there's going to be an application to 11 participate or for intervention. 12 CHAIR KASSEKERT: Okay. 13 MR. OETTLE: Mr. DiGiacomo is correct, 14 Madame Chair. 15 CHAIR KASSEKERT: Very good. Okay. 16 Mr. O'Gara? 17 MR. O'GARA: Paul O'Gara for Tropicana 18 Entertainment. 19 CHAIR KASSEKERT: Thank you. 20 Mr. Mack -- Mr. Brooks, go ahead. 21 MR. BROOKS: Good morning, Madame Chair. 22 Gil Brooks, Wolf Block, appearing on behalf of 23 the Secured Lenders. 24 CHAIR KASSEKERT: Thank you. 25 Mr. Mack? 0091 1 Mr. O'Gara has now joined the Commission 2 staff. 3 (Laughter.) 4 MR. O'GARA: Commissioner Epps is 5 interested in some kind of trade, I believe. 6 (Laughter.) 7 CHAIR KASSEKERT: Don't -- I know what 8 that response will be. Whew. 9 COMMISSIONER FEDORKO: I don't think Mr. 10 O'Gara could afford to join the Commission. 11 (Laughter.) 12 MS. FAUNTLEROY: Make sure that 13 "laughter" is in the minutes, please. 14 CHAIR KASSEKERT: Mr. Mack, you can 15 proceed. 16 MR. MACK: Chair, Commissioners, as you 17 know, late on Friday Justice Stein filed a 18 joint petition with the Steering Committee for 19 Senior Lenders. With that joint petition we 20 have submitted proposed bidding procedures 21 which, if approved, would guide the way that 22 the proposed same under Section 363 would 23 proceed through a bankruptcy process. 24 Also with that petition, we filed the 25 latest draft of the asset purchase agreement 0092 1 which we've been negotiating with the Steering 2 Committee, with the lenders and with the 3 administrative agency under the creditor 4 agreement. 5 As our petition notes, and as one of the 6 exhibits makes clear, that's a draft -- a draft 7 asset purchase agreement. And right now there 8 are currently about ten issues which we would 9 consider open issues. Over the last four weeks 10 or so, I would -- I can represent to you that 11 counsel and all of the parties involved in 12 these negotiations have been acting diligently, 13 attorneys working very late at night and over 14 the weekends to try to get this done as soon as 15 possible. 16 As you can see from the filing, you 17 know, it's about a 90-page document with just 18 multiple issues and multiple conditions and 19 representations and all sorts of assets and 20 liabilities that need to get worked out. And 21 that's the only reason today I don't have for 22 you a finalized agreement. It's simply that 23 we're trying our best, but we have not been 24 able to resolve all of the issues. 25 I think in fairness to the Steering 0093 1 Committee, I should also note that it's not 2 just one party. They're negotiating with 3 Justice Stein and his representatives, but Mr. 4 Brooks represents a committee, and they have to 5 essentially negotiate within themselves, and 6 then come negotiate with Justice Stein. And I 7 think that's also part of the process we're 8 going through. 9 Obviously, since this is now a draft 10 petition -- a draft agreement that's been 11 filed, it begs the question, when are you going 12 to see the final one? I tried to get a 13 consensus yesterday from the attorneys who are 14 sort of leading the negotiations of all of the 15 parties, and pushed them to see if anybody 16 would be willing to commit to me and get this 17 done by this Friday. And the consensus back 18 was no one's willing to make that promise to 19 them, and I can't make that promise to you that 20 we can get this done by this Friday. 21 The consensus I did get from the 22 attorneys involved is everybody's pretty 23 confident we can get these open issues resolved 24 by the end of next week. So what I would 25 propose to you is that we commit to doing 0094 1 everything in our power to filing by no later 2 than Monday, the 30th and what we would 3 consider an executed version of the purchase 4 agreement. 5 I think that leaves, then, questions for 6 you as to given the timing of when we're going 7 to file a finalized agreement. I've been 8 pushing everybody to see if we can't get this 9 whole thing wrapped up and approved by April 10 1st for purposes of, you know, payroll and 11 financial accounting. All the accountants love 12 April 1st as an end date just because it's the 13 beginning of the month. But I do understand 14 that if we're not going to get to you a final 15 agreement until March 30th, that gives you less 16 than 24 hours -- or 48 hours to look at things. 17 Obviously, when we file it, we will give 18 everybody who wants a copy a black line so you 19 can see the changes between what was filed 20 yesterday -- on Monday and what's in the final 21 document. 22 It's -- I think one option would be -- 23 very aggressive option, bringing us back on 24 April 1st with everybody effectively on their 25 feet on the 1st reflect on whatever changes 0095 1 were made in the final document. Or, 2 unfortunately, I think another best option is 3 pushing us to April 15th and establishing a 4 schedule that allows people the time to review 5 this and comment and gives you the time to 6 review it and consider all of the submissions. 7 That's where we are today. Based on the 8 filing that we've made, the schedule, our 9 request today is that we -- I guess get a -- 10 continue this, today's hearing, effectively 11 until the 1st or the 15th, and to come back and 12 at that time consider the purchase agreement 13 and then initiate the sale process thereafter. 14 CHAIR KASSEKERT: Thank you. 15 You want to hold off any questions until 16 we -- okay. 17 Mr. O'Gara? 18 MR. O'GARA: Chair, we obviously would 19 have liked the 1st, if the 15th -- we are, I 20 think, for the open issues. Tropicana 21 Entertainment is a party to this agreement 22 because, as you know, of the contribution over 23 the infamous parking garage land and the other 24 land. The issues that are outstanding, I think 25 a license issue -- I think Mr. Brooks could 0096 1 agree, a name licensing issue, some other 2 things. We believe they'll all be resolved 3 with all the others. And, certainly, we're 4 prepared to go forward on the 15th or even 5 sooner. As part of this agreement, we've seen 6 it. So if we see it for a day, it will be 7 enough because we'll have been part of it. 8 With respect to the only other thing, we 9 would urge you -- and we think it's important, 10 is that if we grant this extension, what you 11 here is a first milestone, which is an 12 agreement approval of bidding procedures. We 13 would urge you to build in here, if you give an 14 extension -- and it's requested for six 15 months -- certain trigger dates. That is, that 16 if there is an approval and an agreement on the 17 1st, that you pick a date by which there is a 18 filing and, if not, we come back here so that 19 we're just not open-ended extended without a 20 filing. Following a filing a date for an 21 auction and for approval procedures. Just 22 though various trigger dates to avoid -- you 23 know, without any formal way for everyone to be 24 noticed and have a procedure to resolve those 25 issues, to make sure that we're not here, and 0097 1 that after approval of this that there isn't a 2 delay of a month and a half that there is a 3 filing. Because I believe that, certainly from 4 the point of view of my client and I believe 5 from the point of view of the State, that once 6 this is resolved, there's an anticipation that 7 there's going to be a very quick filing, and 8 then there's going to be an auction. There's 9 going to be a credit bid, and then there are 10 going to be some decisions made. And we would 11 just urge to build those trigger dates into any 12 six months extensions and not just make it 13 unconditional. 14 CHAIR KASSEKERT: Thank you. 15 Mr. Brooks? 16 MR. BROOKS: Thank you, Madame Chair. 17 Finishing up on the last point, there 18 are most, I think, of the trigger dates are 19 actually covered by the asset purchase 20 agreement, so there are some protections there. 21 But I do think that's a good idea there are 22 some milestones. There's a time line that's 23 been submitted as an exhibit in connection with 24 this application, and I think the time line 25 actually envisions certain actions happening in 0098 1 certain dates, most of which, again, are 2 reflected in the asset purchase agreement as 3 commitments and contractual obligations. So 4 I -- but I think that's a great idea in terms 5 of making sure the process moves by dates 6 certain. 7 In terms of the asset purchase 8 agreement, there are a number of business 9 decisions that have to be made. There are 10 negotiations that have to take place. It has 11 to be agreed upon. It's complex. There's a 12 lot of employment issues that have to be 13 resolved. And it -- these issues are being 14 negotiated as we speak. I think everybody has 15 worked as hard as possible in order to get this 16 thing done. I think on the IP issues, the 17 other issues related to Tropicana 18 Entertainment, I don't think they're 19 substantial. Just a matter of getting 20 schedules that are needed, but the business 21 issues have to be resolved. But I think it can 22 be resolved within a two-week time frame. And 23 we would have a finalized asset purchase 24 agreement sometime by the March 27th. March 25 30th gives us a weekend to get it done and get 0099 1 it in and get it filed. I think that is a 2 realistic time frame. 3 I would say that if we can't get it done 4 in that time frame, there won't be a deal. So 5 I think it can be done in that time frame. 6 So I think that we can submit it, and 7 then it's a function of how much time the 8 Division will need and how much time the 9 Division will need in terms of evaluating it. 10 And that would cover when the second hearing -- 11 or the next hearing takes place. 12 CHAIR KASSEKERT: Thank you. 13 Mr. Adams? 14 MR. ADAMS: Well, perfect segue right 15 there. 16 We feel it's important that you and the 17 Division have a final proposed agreement. 18 CHAIR KASSEKERT: Uh-hum. 19 MR. ADAMS: Without that, we can just 20 keep coming back here and basically butting our 21 heads and talking about all this other stuff, 22 but that is extremely important from our 23 perspective. So assuming these are the dates, 24 and March 30th is the last date that we 25 actually get it and you get it, we, of course, 0100 1 will defer to your discretion as to what you 2 feel is appropriate. There should be trigger 3 dates with this Commission regardless of the 4 trigger dates that are in the agreement. 5 As to when, who's going to respond to it 6 on what date, and when we're going to respond 7 to it -- because, quite honestly, we would like 8 to be in a position to respond to it after 9 everyone else has already responded to it. So 10 you have all of that before you in ample time 11 for you to consider all of it, and then have 12 the meeting. 13 CHAIR KASSEKERT: I don't think you can 14 have any fear that we won't want to have 15 trigger dates. 16 (Laughter.) 17 CHAIR KASSEKERT: Let me ask if the 18 Commissioners have any questions? 19 Commissioner Epps? 20 VICE CHAIR EPPS: I don't even know if 21 this is a question as much as a comment. I'm 22 just -- I'm guardedly apprehensive, I guess. 23 Because I'm -- I'm encouraged because it's the 24 first time that we've had an extension request 25 accompanied by a real document that gets us to 0101 1 something almost certain, as opposed to can you 2 just extend it again because we're just not 3 ready. Some -- my initial reaction when I 4 heard that we were getting an extension request 5 was somewhat dismay because when we left our 6 last meeting, I think we set February 23rd as a 7 date that we would have a document, and 8 everybody walked away saying, yes. That's a 9 good date. We'll get that document in. And 10 now we're at March 18th, and we've got a 11 document that we hear is still not done. But I 12 think this is considering -- and I do not for 13 an instant give short shrift to the degree of 14 complexity that this document contains, and I 15 absolutely understand that and appreciate that. 16 I just want to know, are we really 17 talking about a conclusion on the 30th? I 18 mean, we -- don't say it just to placate the 19 Commission. I mean, if we're really looking at 20 that date, then I'm confident that we should 21 move it forward and look to some of these 22 trigger dates. But I really need to know that 23 we're talking about a conclusion as opposed to 24 saying what needs to be said to get us past 25 today. 0102 1 MR. MACK: I'll go first. 2 Commissioner, I completely understand 3 what you're saying. I think when we were here 4 last time, and part of what I did, and I think 5 part of what the Commission rightly did last 6 time, was try to impose some short deadlines to 7 force us all to sit down and lock ourselves in 8 the room. And that's what happened over of the 9 last couple weeks, and that's why today we are 10 this close to being done. 11 Now, there are ten issues, open issues 12 on the list. I'm told the benefits people on 13 both sides -- people got together yesterday, 14 and I'm told some of the issues, Debevoise is 15 redrafting. Sounds like one issue is done. A 16 couple of issues, we've pushed each other as 17 far as we're going to go, and each side got has 18 got to go back and say, we've pushed as far as 19 we're going to go. As Gil -- Mr. Brooks said, 20 we're going to give in on this issue and move 21 past it and/or not. And at this time there's 22 really only a handful of issues left. 23 And this is -- and I can tell you, in my 24 communication with the M & A attorneys, this is 25 the most committed statements I've gotten from 0103 1 anyone saying, yeah, we can get this done by 2 last week. One of them even went as far as 3 saying this is a slam dunk. 4 CHAIR KASSEKERT: Mr. Brooks? 5 MR. BROOKS: I will say that we'll 6 either have a deal or we'll not have a deal by 7 March 27th. And the issues that have to be 8 resolved, to some degree will -- I think, 9 actually, there's several issues that have now 10 been eliminated from the list that we have 11 submitted to you. Three have been eliminated, 12 there's been a resolution on. Some are 13 flat-out business decisions. For example, 14 management severance agreements in terms of 15 employees. You know, you're talking about, are 16 you going to accept having to be responsible 17 for a million-plus dollars, things along those 18 lines. And some of that will have to -- will 19 have to have -- the lenders will have to agree 20 to them once negotiating process is through. 21 And so I think that there are some things that 22 have to happen from a business perspective. 23 But I will say that, talking with all 24 the lawyers involved in this negotiation, 25 everybody feels that there will be a deal or no 0104 1 deal by March 27th. And we'll have a finalized 2 document for you March 30th to the extent we 3 move forward with this. And I think, you know, 4 everybody remains committed to completing the 5 process. 6 CHAIR KASSEKERT: All right. 7 Any other questions? 8 COMMISSIONER SOMMELING: No questions, 9 Madame Chair. 10 CHAIR KASSEKERT: Okay. All right. 11 VICE CHAIR EPPS: My other -- 12 CHAIR KASSEKERT: Commissioner Epps? 13 VICE CHAIR EPPS: -- question, I guess, 14 is for Len. 15 Are we in a position today to set the -- 16 or Dianna -- to set those benchmark -- those 17 target dates in our resolution? Are we ready? 18 MR. DiGIACOMO: I -- on behalf of the 19 General Counsel, if I may, Commissioner, I 20 think that that -- for today's purposes, is 21 probably a premature action. I understand Mr. 22 O'Gara's point, and it's a good one. But I 23 think that unless you were prepared today to 24 move forward with what you have before you, I 25 think setting out that time table may abide the 0105 1 event of the actual disposition of some of 2 the -- 3 VICE CHAIR EPPS: That's what I was 4 thinking. I didn't know that we had that 5 information before us to do that today. 6 MR. DiGIACOMO: And through the Chair, I 7 don't know if Mr. O'Gara would disagree with 8 that. 9 MR. O'GARA: No. I don't disagree. I 10 think my point was we would, hopefully, find 11 them in a resolution. Obviously, better if 12 it's done today. Everybody signs off on the 13 agreement if there is an agreement. I think 14 our fear was that we get a resolution today 15 that goes for six months, and then you have to 16 back into it. Perhaps if you go with a 17 resolution that goes today for two weeks and 18 then you do the six months -- whatever you do. 19 I think the point -- my point is made, and I 20 believe by you well taken. 21 Thank you. 22 VICE CHAIR EPPS: All right. 23 CHAIR KASSEKERT: Any other? 24 Commissioner Sommeling? 25 COMMISSIONER SOMMELING: In terms of the 0106 1 the significant issues is the Exhibit 3 that we 2 have, essentially what we're talking about as 3 far as outstanding issues are concerned? Is 4 that the list that you've come up with at this 5 point? 6 MR. BROOKS: Yes. That is the list, and 7 I think things have been eliminated from the 8 list. 9 COMMISSIONER SOMMELING: Okay. Three 10 have been eliminated from that list? 11 MR. BROOKS: Yes. 12 COMMISSIONER SOMMELING: So the 13 remainder is what we're talking about? 14 MR. BROOKS: Yes, Commissioner 15 Sommeling. The remainder -- it's all the -- we 16 gave you everything that is outstanding on the 17 list, it's exhibit that's been submitted with 18 the petition. Some of those issues have now 19 been resolved. They've been resolved in the 20 interim time period. And the rest of them 21 have -- there's some negotiating that has to be 22 done. There's -- some of them are just 23 providing materials, schedules. For example, 24 disclosure statements have schedules, and we 25 need the schedules. We need to get materials 0107 1 from the different parties. That has -- we 2 don't have that yet. So it has to be reviewed. 3 It doesn't appear to be a problem. It's just 4 that we don't have it yet. So that's some of 5 it. It's disclosures. Then there are some 6 issues that are just -- we're going to have 7 to -- we're still getting into a final posture. 8 Then there's going to have to be a business 9 decision made. 10 COMMISSIONER SOMMELING: Okay. No more 11 questions. 12 CHAIR KASSEKERT: Okay. All right. 13 We're going to take a brief recess. 14 (A recess was taken from 12:04 to 1:15 15 p.m.) 16 CHAIR KASSEKERT: We'll go back on the 17 record. 18 Let me ask at this point if there are 19 any other matters that need to be brought to 20 our attention at this time? 21 MR. BROOKS: No, Madame Chair. 22 CHAIR KASSEKERT: No? Okay. Thank you. 23 Seeing none, we'll move forward. 24 Last month the Commission extended until 25 today the deadline by which Justice Stein is to 0108 1 dispose of Adamar's property for purposes of 2 Subsection 95.14E of the Act. Throughout the 3 process, our attention has been called to the 4 free-and-clear sale provisions of Section 363 5 of the Federal Bankruptcy Code and whether a 6 so-called "stalking horse" under those 7 provisions might emerge. Last month, in 8 reliance in large part upon the representations 9 from the Steering Committee of the Secured 10 Lenders that its members were prepared to make 11 a credit bid or serve as the stalking horse in 12 bankruptcy, we established a timetable that, if 13 met, potentially would have created a record 14 before us today upon which we might have 15 disposed of the matter. 16 Critical to that schedule was the timely 17 submission to us of a final draft of an asset 18 purchase agreement, an APA, and bidding 19 proceedings that, if we were to have found them 20 satisfactorily -- satisfactory, would then be 21 presented to the bankruptcy court for its 22 consideration. Unfortunately, those materials 23 have only just recently arrived as attachments 24 to the joint petition for further extension 25 that was filed two days ago. 0109 1 I do not perceive the failure to adhere 2 to the proper timetable as a flouting of our 3 policies and deadlines, from which I am 4 prepared to grant limited relief. If it were 5 otherwise, I, and I venture to say the other 6 Commissioners, also, might not be so sanguine 7 about the delay's impact on the overall 8 process. However, it is apparent from the 9 recently submitted materials extensive progress 10 has been made in grappling with the complicated 11 and unprecedented contract matters, which we 12 have been told that the parties expect to 13 resolve by March 27, 2009. 14 Given the recent submissions, no one can 15 reasonably expect the Commission to 16 conclusively resolve the matter today. 17 Further, with certain contract issues still in 18 flux, it appears prudent to require the 19 submission of a more definitive draft of the 20 purchase agreement before establishing a 21 briefing schedule. Thus, while I would be 22 prepared to recommend that we grant a further 23 extension of the sale period until April 30th, 24 2009, I do so conditioned on a strict adherence 25 to the following timetable: 0110 1 One, by March 30th, 2009, the Joint 2 Petitioners must file their final draft of the 3 asset purchase agreement and serve it as 4 appropriate. And as so amended, an updated by 5 that filing, responses to the Joint Petition, 6 along with any motions to intervene or 7 participate in such matter will now be due by 8 April 6th, 2009, except for the Division, which 9 will be afforded until April 8th, 2009. Any 10 reply from Justice Stein and the Joint 11 Petitioner would be due by April 10th, 2009. 12 If adhered to, that timetable will 13 afford us the opportunity to consider the 14 matter on April 15th, 2009. However, before 15 calendaring -- calendaring -- thank you -- it 16 for that date, I would need to be satisfied 17 that the Commission substantially will have 18 before it a comprehensive record on which to 19 rule. Certainly, much will depend on whether 20 the terms of the asset purchase agreement, the 21 bidding procedures, or other critical 22 components of the Section 363 process still 23 remain a work in progress or have sufficiently 24 coalesced to allow us to move forward. 25 Accordingly, building in a two-week 0111 1 buffer seems prudent. However, I and the other 2 Commissioners will pay particular heed to 3 ensure that the diversionary tactics aimed at 4 needless delay do not supplant the process. I 5 am counting on the full cooperation of all 6 concerned. But in the like -- unlikely event 7 that such is not forthcoming, any offenders 8 should be prepared to face the consequences. 9 The Division reiterates its call for a 10 continuation of the cash balance requirement as 11 modified by our action earlier today, and I 12 will be prepared to move forward on that basis. 13 Subject to my earlier comments and the 14 conditions therein recommended, I move to adopt 15 the draft resolution and extend the sale period 16 through April 30th, 2009, while deferring 17 action on the remainder of the relief requested 18 in the joint petition, and I so move. 19 Is there a second? 20 COMMISSIONER 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.) 0112 1 CHAIR KASSEKERT: Motion carries. 2 MR. DiGIACOMO: Thank you, Chair. 3 MR. O'GARA: Thank you. 4 MR. BROOKS: Thank you, Chair, members 5 of the Commission. 6 MR. NANCE: For your consideration, Item 7 No. 15, consideration of the application of the 8 Trustee and Conservator for the former casino 9 licensee, Adamar of New Jersey, Inc., for 10 approval of fees for the Conservator/Trustee, 11 personal counsel, legal, and other consultants. 12 Miss Fauntleroy? 13 MS. FAUNTLEROY: Good afternoon. 14 The last item for your consideration are 15 the requests for the approval of fees for the 16 Conservator and his consultants. 17 You have before you the Conservator's 18 bill for the period February 1 through the -- 19 through February 28 for the amount of 20 $39,222.03; his personal counsel, Pashman 21 Stein, for that same period in the amount of 22 63,990. For Cole Schotz bankruptcy counsel, 23 for that same period in the amount of 24 162,252.41. For Debevoise & Plimpton, 25 acquisition -- mergers and acquisitions 0113 1 counsel, for the period February 1 through 2 February 12 in the amount of 49,243.76. JH 3 Cohn, financial advisor, for the period 4 February 1 through February 12 in the amount of 5 $112,000 -- excuse me. Their's is February 1 6 through February 28 in the amount of 7 112,973.24. 8 We have Mary Jo Flaherty for the 9 Division and Sean Mack for Justice Stein. 10 CHAIR KASSEKERT: Mr. Mack? 11 MR. MACK: Good afternoon, Chair and 12 Commissioner. 13 You have our invoices. If you have any 14 questions, I'll be happy to answer them. 15 CHAIR KASSEKERT: Thank you. 16 Miss Flaherty? 17 MS. FLAHERTY: Yes, Chair, 18 Commissioners. 19 The Division, as usual, has reviewed the 20 amounts billed in terms of the hours and the 21 amount per hour, and they appear to be accurate 22 in that regard. 23 I have one comment with regard to the 24 invoices. It has to do with Debevoise & 25 Plimpton. A review of the amount billed shows, 0114 1 in my counting, approximately three-quarters -- 2 or three-fifths of the amount relates to 3 conflicts, data entry related conflicts, and 4 retention arrangements in terms of the 5 bankruptcy filing, getting approval to be 6 retained through the bankruptcy proceeding. 7 The conflicts amount were approximately 8 $20,000, a little over $20,000. The data entry 9 was about 2500, and the retention was over 10 $5,000. This raises the same issue that we had 11 brought up before with regard to, I believe, 12 the January to -- December, January billings. 13 We think that that's an excessive amount with 14 regard to conflict checks. 15 I would also note that Cole Schotz had 16 to spend time with regard to preparing papers 17 for Debevoise for the bankruptcy as well, so 18 there were other expenses involved in that 19 regard. 20 We leave, as usual, the approval of 21 these bills to the Commission's discretion, but 22 I wanted to note that information and our 23 position is subject to the continuation of the 24 $19 million cash reserve balance in compliance 25 with that. 0115 1 Thank you very much. 2 CHAIR KASSEKERT: Thank you. Let me ask 3 if we have any questions? 4 VICE CHAIR EPPS: Madame Chair, I would 5 move that we approve the following invoices: 6 Conservator/Trustee Stein's for the period 7 February 1 through February 28, 2009, in the 8 amount of $39,222.03; Pashman Stein for the 9 period February 1 through February 28, 2009, in 10 the amount of $63,990 -- I believe that's 11 accurate; Cole Schotz for the period February 1 12 through February 28th, 2009, in the amount of 13 162,252.41; Debevoise & Plimpton for the period 14 February 1, through February 12, 2009, in the 15 amount of $25,994; and JH Cohn for the period 16 of February 1 through February 28th, 2009, in 17 the amount of 112,973.24, all subject to the 18 conditions imposed in the Commission Resolution 19 No. 08-06-04-15 and 08-06-18-21, including 20 provisions of daily cash schedules and updated 21 forecasts or as adjusted by the prior 22 resolution today. 23 CHAIR KASSEKERT: Thank you. 24 COMMISSIONER SOMMELING: Second. 25 CHAIR KASSEKERT: Is there a second? 0116 1 COMMISSIONER SOMMELING: 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. MACK: Thank you. 9 MS. FLAHERTY: Thank you. 10 MR. NANCE: In accordance with 11 Resolution No. 08-12-10-22, the next closed 12 session of the Commission shall be held on 13 Wednesday, April 1, 2009, at 9:15 a.m. in the 14 Commission offices. 15 It is now time for the public 16 participation of the meeting. 17 CHAIR KASSEKERT: Is there anyone from 18 the public who wishes to be heard? 19 (No response.) 20 CHAIR KASSEKERT: Seeing no one, I'll 21 declare this portion of the motion closed and 22 entertain a motion to adjourn. 23 COMMISSIONER SOMMELING: Motion to 24 adjourn. 25 COMMISSIONER FEDORKO: Second. 0117 1 CHAIR KASSEKERT: The motion has been 2 made and seconded. All in favor? 3 (Ayes.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: Motion carries. 7 (Public Meeting 09-03-18 was adjourned 8 at 1:25 p.m.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0118 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: March 22, 2009 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25