1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 09-04-29 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, April 29, 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 10:46 a.m. to 12:36 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 2 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 SETH H. BRILLIANT, SENIOR COUNSEL 10 LON E. MAMOLEN, SENIOR COUNSEL ROBERT A. MONCRIEF, COUNSEL 11 CLAIRE FRANK, PROGRAM MANAGER BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 12 DIVISION OF GAMING ENFORCEMENT: 13 DEPUTY ATTORNEYS GENERAL 14 JOHN E. ADAMS, JR., DEPUTY ATTORNEY GENERAL BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL 15 TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL CHANTA L. HOWARD, DEPUTY ATTORNEY GENERAL 16 MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 17 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 2 JOSEPH A. CORBO, JR., ESQ. FOR: JOSEPH INTILI 3 ITEM NO. 7 CLAIRE FRANK, PROGRAM SUPERVISOR 4 MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL MICHAEL A. MAGAZZU, ESQ. 5 FOR: HARRAH'S ENTITIES 6 ITEM NO. 8 ROBERT A. MONCRIEF, COUNSEL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 7 MICHAEL A. MAGAZZU, ESQ. FOR: HARRAH'S ENTITIES 8 ITEM NO. 14 LEONARD J. DiGIACOMO, ASSISTANT GENERAL 9 COUNSEL JOHN E. ADAMS, JR., DEPUTY ATTORNEY 10 GENERAL PASHMAN STEIN 11 JUSTICE GARY S. STEIN SEAN MACK, ESQ. 12 FOR: CONSERVATOR/TRUSTEE 13 DUANE MORRIS GILBERT BROOKS, ESQ. 14 FOR: SECURED LENDERS 15 DEBEVOISE & PLIMPTON KYLE A. PASEWARK, ESQ. 16 STERNS & WEINROTH, PC 17 PAUL M. O'GARA, ESQ. FOR: TROPICANA ENTERTAINMENT 18 MICHAEL D. SIROTA, ESQ. 19 FOR: ADAMAR OF NEW JERSEY, INC. 20 ITEM NO. 15 DIANNA W. FAUNTLEROY, GENERAL COUNSEL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 21 PASHMAN STEIN SEAN MACK, ESQ. 22 FOR: CONSERVATOR/TRUSTEE 23 24 25 4 1 AGENDA PUBLIC MEETING NO. 09-04-29 2 April 29, 2009, 10:46 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 8 8 April 15, 2009, public meeting 4 2 Applications for employee and casino service industry licenses 5 14 initial and/or renewal of casino key 8 9 and casino employee licenses 6 3 initial and/or renewal of casino key 9 10 and casino employee licenses 7 Application of Lake Shore Studios, Inc., 10 10 (t/a Stone Designs) for casino service 8 industry license Application of Joseph Intili for a casino 10 11 9 key employee license and for qualification as Vice President of Relationship Marketing 10 for Marina District Development Company 3 Stipulations of settlement and consent 11 Agreements: a) Jennifer A. Rosario (a/k/a Jennifer 12 13 12 Giannetta and Jennifer Jones) (08-0872-ER b) Regino Rodriguez (08-0896-EA) 12 13 13 c) Robert Soto (08-0229-EA) 12 13 d) Michael B. Faulkner (08-0432-ER) 12 13 14 e) Amoon Williams (a/k/a/ Amoon William) 12 13 (08-0803-RC) 15 4 Initial decision application of Shan P. 13 15 Patel for a casino employee license; and 16 State v. Shan P. Patel (a/k/a Hardik P. Patel) 07-0768-EA; 08-0679-RC) 17 5 Applications for suspension: a) Charita R. Jackson (09-0261-RC) 15 17 18 b) Bok H. Lee (09-0263-RC) 15 17 c) Michael D. Robb (09-0262-RC) 15 17 19 d) Stephen J. Vitkow (09-0264-RC) 15 17 6 Consideration of forfeiture order in 17 20 20 State v. Marina District Development Company, LLC, (d/b/a Borgata Hotel, Casino 21 & Spa) and Walter Cohen (a/k/a Al Silver) and Petition of Walter Cohen (a/k/a Al Silver) 22 for removal from the Exclusion List (07-0352-VC, 07-0637-MI) 23 7 Consideration of the qualification of 20 22 Bradley Warga to serve as Vice President 24 of Talent and Employee Engagement for Harrah's Entertainment, Inc., and Harrah's 25 Operating Company 5 1 CONTINUED AGENDA PUBLIC MEETING NO. 09-04-29 2 April 29, 2009, 10:46 a.m. ITEM PAGE VOTE 3 8 Petition of Harrah's Atlantic City 23 24 Operating Company, LLC (d/b/a Harrah's 4 Atlantic City) for approval to amend its casino license and operation certificate 5 (PRN 1050903) 9 Petition of "TotalUp, Inc., and Trump 25 26 6 Marina Associates, LLC, (d/b/a Trump Marina Hotel Casino) for approval of "Total Craps" 7 as a variation of the authorized game of craps pursuant to NJSA 5:12-5 and NJAC 19:47-8.4 8 (PRN 0720905) 10 Proposed publication of amendments to 26 28 9 NJAC 19:41-9.9, 19:42-8.5, 19:43-10.2, 10.4, 10.5 and 10.7, 19:51-1.2A, 1.2B, 1.5, 1.13 10 and 2.1; proposed repeal of NJAC 19:41-5.11A (Revised dollar thresholds for non-gaming 11 related casino service industries; "gross revenue" exemption; repeal of NICE filing) 12 11 Proposed temporary adoption of 29 31 amendments for "EZ Baccarat;" authorization 13 of rulemaking experiment for "EZ Baccarat" pursuant to NJSA 5:12-69e 14 12 Proposed temporary adoption of amend- 31 34 ments and new rules for Mini-Tex 3 card Hold'Em; 15 authorization of rulemaking experiment for Mini-Tex 3 Card Hold'Em pursuant to NJSA 5:12-69e 16 13 Proposed adoption of amendments to NJAC 34 35 19:45-1.54 (gaming vouchers; physical 17 characteristics; procedures for issuance and redemption) 18 14 Amended joint petition of the Trustee 42 86 and Conservator for Adamar of New Jersey, Inc., 19 et al. to extend the sale period, approve an asset purchase agreement and authorize 20 a bankruptcy filing (PRN 0750903) Kyle A. Pasewark, sworn 56 21 15 Applications of the Trustee/Conservator 35 42 for the former casino licensee, Adamar of 22 New Jersey, Inc., for approval of fees for the Conservator/Trustee, his personal counsel, 23 legal, and other consultants 24 PUBLIC PARTICIPATION: Alice Gordon 87 25 6 1 E X H I B I T S : 2 NO. DESCRIPTION EVD 3 ITEM NO. 2 4 P-1 Remand for hearings 14 license X 5 P-2 Grant 3 licenses X 6 7 ITEM NO. 15 8 D-1 Division Report, 4-22-09 X Re: Petition No. 0750903 9 JP-1 Form of asset purchase agreement and 10 Exhibits dated 4-29-09 11 JP-2 Letter, 4-28-09, from Damien Zoubek X to Gilbert Brooks 12 Re: Tropicana initial required lender approval 13 JP-3 Letter, 4-28-09, from Mark Broude to X Justice Gary Stein 14 Re: Petition to sell assets of Adamar Pursuant to Section 363 of the Bankruptcy Code 15 16 17 18 19 20 21 22 23 24 25 Exhibits were retained by the Commission. 7 1 (Public Meeting 09-04-29 was commenced 2 at 10:37 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 cell phones in the public 19 meeting room while the Commission is in session 20 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 8 ITEM NO. 1-2 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 Commissioner approved the April 8 15th, 2009, closed session minutes. 9 Item No. 1, ratification of the minutes 10 of April 15th, 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 List 1 and 2. 24 Exhibit List 1 consists of 14 25 applications nor initial and/or renewal of 9 ITEM NO. 2 1 casino key and casino employee licenses. 2 The Division has objected to licensure. 3 VICE CHAIR EPPS: Move that we remand 4 these matters for hearing. 5 COMMISSIONER FEDORKO: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 (No response.) 11 CHAIR KASSEKERT: Motion carries. 12 MR. NANCE: Exhibit List 2 consists of 13 three applications for initial and/or renewal 14 of casino key and casino employee licenses. 15 Staff and Division have recommended that 16 these licenses be granted. 17 VICE CHAIR EPPS: I move that we grant 18 the applications. 19 COMMISSIONER FEDORKO: 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.) 10 ITEM NO. 2 1 CHAIR KASSEKERT: Motion carries. 2 MR. NANCE: For your consideration is 3 the casino service industry license application 4 of Lake Shore Studios, Inc., pursuant to NJSA 5 5:12-92(c). 6 Staff and the Division have recommended 7 that this application be granted. 8 COMMISSIONER FEDORKO: Motion to grant 9 application. 10 COMMISSIONER SOMMELING: Second. 11 VICE CHAIR EPPS: Second. 12 CHAIR KASSEKERT: The motion has been 13 made and seconded. All in favor? 14 (Ayes.) 15 CHAIR KASSEKERT: Opposed? 16 (No response.) 17 CHAIR KASSEKERT: Motion carries. 18 MR. NANCE: For your consideration is 19 the application of Joseph Intili for casino key 20 employee license and for qualification as Vice 21 President of Relationship Marketing for Marina 22 District Development Company. 23 MR. CORBO: Chair, Commissioners, we're 24 just here to observe. We know and just wanted 25 to be here for this occasion. 11 ITEM NO. 3 1 CHAIR KASSEKERT: Thank you. 2 MR. CORBO: Mr. Intili is our Vice 3 President of Relationship Marketing and has 4 held that position since Borgata's opening 5 about six years ago. 6 CHAIR KASSEKERT: Good morning, Mr. 7 Intili. 8 MR. INTILI: Thank you. Good morning. 9 MR. NANCE: Staff and the Division have 10 recommended that this application be granted. 11 COMMISSIONER FEDORKO: Motion to grant 12 initial key license for qualification. 13 COMMISSIONER SOMMELING: Second. 14 CHAIR KASSEKERT: Motion is made and 15 seconded. This is a roll call vote. 16 MR. NANCE: Commissioner Fedorko? 17 COMMISSIONER FEDORKO: Yes. 18 MR. NANCE: Commissioner Sommeling? 19 COMMISSIONER SOMMELING: Yes. 20 MR. NANCE: Vice Chair Epps? 21 VICE CHAIR EPPS: Yes. 22 MR. NANCE: Chair Kassekert? 23 CHAIR KASSEKERT: Yes. 24 MR. NANCE: The record will reflect that 25 the motion is unanimous. 12 ITEM NO. 3 1 Item No. 3, stipulation of settlement 2 and consent agreements. When I call your name, 3 please come forward, standing behind this 4 middle table, spreading across the room so that 5 you may be seen: Jennifer Rosario, Regino 6 Rodriguez, Robert Soto, Michael Faulkner, and 7 Amoon Williams. 8 CHAIR KASSEKERT: Thank you. 9 Has everyone whose name been called come 10 forward at this point? 11 I going to ask that you each state your 12 name for the record, starting with you, sir. 13 MR. SOTO: Robert Soto. 14 MR. FAULKNER: Michael Faulkner. 15 MR. WILLIAMS: Amoon Williams. 16 CHAIR KASSEKERT: Okay. In a moment we 17 are going to vote on the stipulations which 18 you've agreed to with the Division of Gaming 19 Enforcement. I'm going to ask at this point if 20 any of you wish to be heard on your matter. 21 You don't have to say anything if you don't 22 want to. 23 Does anyone wish to be to be heard? 24 (No response.) 25 CHAIR KASSEKERT: Okay. I'll take that 13 ITEM NO. 4 1 as a "no." 2 Division? 3 MS. HOWARD: Good morning, Chair and 4 Commissioners. 5 The Division requests that the 6 stipulations be approved as submitted. 7 Thank you. 8 CHAIR KASSEKERT: Thank you. 9 Any questions? 10 COMMISSIONER SOMMELING: No questions, 11 Madame Chair. 12 Move to approve the stipulations. 13 VICE CHAIR EPPS: Second. 14 COMMISSIONER FEDORKO: 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 Thank you for coming. Good you luck. 22 MR. SOTO: Thank you. 23 MR. FAULKNER: Thank you. 24 MR. WILLIAMS: Thank you. 25 MR. NANCE: Item No. 4, initial decision 14 ITEM NO. 4 1 and application of Shan P. Patel for casino key 2 employee license and State versus Sean P. 3 Patel. 4 Mr. Mamolen? 5 MR. MAMOLEN: Chair, Commissioners, you 6 have before you Commissioner Fedorko's initial 7 decision with the disposition of a denial of a 8 casino employee license application or 9 revocation of a casino service employee 10 registration and a finding of no cause -- good 11 cause to allow Mr. Patel to pursue any 12 noncredential employment in the casino 13 industry. 14 This is all based upon a finding of 15 disqualification that Mr. Patel had engaged in 16 conduct constituting conspiracy to commit 17 credit card fraud. 18 Counsel with us is Chanta Howard, who 19 represented the Division at the initial 20 decision. 21 And I ask the audience if Mr. Patel is 22 in the gallery? 23 (No response.) 24 MR. MAMOLEN: No appearance. 25 CHAIR KASSEKERT: No appearance. 15 ITEM NO. 5 1 Miss Howard? 2 MS. HOWARD: The Division requests that 3 the initial decision is adopted. 4 CHAIR KASSEKERT: Thank you. 5 Any questions? 6 COMMISSIONER SOMMELING: Madame Chair, 7 move to adopt the initial decision and: A, 8 find Mr. Patel disqualified; 9 B, deny his casino employee license 10 application and revoke his casino service 11 employee service registration; 12 And, C, prohibit him from employment by 13 casino licensee in any capacity. 14 VICE CHAIR EPPS: 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 MR. NANCE: Item No. 5, application for 22 suspension for Charita Jackson, Bok Lee, 23 Michael Robb, and Stephen Vitkow. 24 Miss Frigen? 25 MS. FRIGEN: Good morning, Madame Chair 16 ITEM NO. 5 1 and Commissioners. 2 Before we hear from the Division, let me 3 inquire whether any of these individuals are 4 present or represented here today? 5 (No response.) 6 MS. FRIGEN: I don't believe so. I 7 didn't see their names registered. 8 CHAIR KASSEKERT: Thank you. 9 Mr. Biscieglia? 10 MR. BISCIEGLIA: Good morning, Chair, 11 Commissioners. The Division would just like to 12 add to its pleading with regards to A, Charita 13 Jackson, on October 20th of 2008, Miss Jackson 14 was indicted in Atlantic County for one count 15 of theft, third degree. 16 And in regards to D, Stephen Vitkow, on 17 December 26th of 2008, he was also indicted in 18 Atlantic County for one count of theft, third 19 degree. Both of those matters are currently 20 awaiting status conferences. 21 Other than that, the Division has 22 nothing further to add and request that the 23 applications be granted. 24 Thank you. 25 CHAIR KASSEKERT: Thank you. 17 ITEM NO. 6 1 Any questions? 2 COMMISSIONER SOMMELING: No questions, 3 Madame Chair. 4 VICE CHAIR EPPS: Madame Chair, I move 5 that we grant the Division's applications for 6 suspension. 7 COMMISSIONER FEDORKO: Second. 8 CHAIR KASSEKERT: The motion has been 9 made and seconded. All in favor? 10 (Ayes.) 11 CHAIR KASSEKERT: Opposed? 12 (No response.) 13 CHAIR KASSEKERT: Motion carries. 14 MR. BISCIEGLIA: Thank you. 15 MR. NANCE: Item No. 6, consideration of 16 forfeiture order in State versus Marina 17 Development Company, LLC, and Walter Cohen, and 18 petition for Walter Cohen for removal from the 19 exclusion list. 20 Miss Frigen? 21 MS. FRIGEN: Madame Chair, 22 Commissioners, let me inquire whether Mr. Cohen 23 or a legal representative on his behalf is 24 present? 25 (No response.) 18 ITEM NO. 6 1 MS. FRIGEN: Okay. Apparently not. 2 As indicated, for your consideration is 3 final action on both the forfeiture complaint 4 and Mr. Cohen's petition seeking removal from 5 the exclusion list to which the Division had 6 interposed an objection to that petition. 7 We have received correspondence from 8 Borgata counsel indicating that they do not 9 oppose the forfeiture action. 10 I would note that Mr. Cohen initially 11 requested a hearing on his forfeiture case as 12 well as a petition for removal. However, he 13 subsequently failed to show for several 14 proceedings. And in a staff letter to him in 15 February, he was advised that unless he 16 advanced his desire to pursue a hearing, both 17 proceedings would be deemed abandoned. 18 We have not heard from him since, and 19 the matter is now presented for you today. 20 CHAIR KASSEKERT: Thank you. 21 Mr. Ficchi? 22 MR. FICCHI: Yes. Good morning, Madame 23 Chair, Commissioners. 24 The Division has nothing further on this 25 matter other than that ask that the forfeiture 19 ITEM NO. 6 1 order be granted. And you have the history of 2 this matter, which is fairly extensive. And as 3 Miss Frigen just advised you, as to the history 4 of it, it's pretty long, and I think we're 5 ready for a decision at this point. 6 CHAIR KASSEKERT: Thank you. 7 MR. FICCHI: Thank you. 8 CHAIR KASSEKERT: Any questions? 9 COMMISSIONER SOMMELING: No questions, 10 Madame Chair. 11 VICE CHAIR EPPS: Madame Chair, with 12 respect to the forfeiture complaint, I move 13 that due to Walter Cohen being on the 14 Commission's exclusion list on the day of the 15 gaming activity, the money theoretically won by 16 Mr. Cohen is forfeited and that Marina District 17 Development Company, LLC, be directed to remit 18 the forfeited money to the Commission in 19 accordance with NJSA 5:12-71.3(c). 20 Should we take them in separate motions? 21 CHAIR KASSEKERT: Do you want separate 22 votes or one vote? 23 MS. FAUNTLEROY: Two separate items. It 24 should be separate. 25 CHAIR KASSEKERT: Two separate items. 20 ITEM NO. 7 1 Commissioner Epps has made a motion. Is 2 there a second? 3 COMMISSIONER SOMMELING: Second. 4 COMMISSIONER FEDORKO: Second. 5 CHAIR KASSEKERT: The motion has been 6 made and seconded. All in favor? 7 (Ayes.) 8 CHAIR KASSEKERT: Opposed? 9 (No response.) 10 CHAIR KASSEKERT: Motion carries. 11 VICE CHAIR EPPS: With respect to the 12 petition to be removed from the exclusion list, 13 I move that we deny Mr. Cohen's petition for 14 removal from that list. 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 MR. FICCHI: Okay. Thank you. 24 MR. NANCE: Item No. 7, consideration of 25 the qualification of Bradley Warga to serve as 21 ITEM NO. 7 1 Vice President of Talent and Employment 2 Engagement for Harrah's Entertainment, Inc., 3 and Harrah's Operating Company. 4 Miss Frank? 5 MS. FRANK: Good morning, Chair, 6 Commissioners. 7 Brad Warga received temporary 8 qualification from the Commission on August 6th 9 of last year. A draft resolution on his 10 plenary qualification has been circulated to 11 the parties. 12 And we have Michael Magazzu here for 13 Harrah's and Mary Jo Flaherty for the Division. 14 CHAIR KASSEKERT: Thank you. 15 Good morning, Mr. Magazzu. 16 MR. MAGAZZU: Good morning, Chair, 17 Commissioners 18 CHAIR KASSEKERT: Anything to add on 19 this petition? 20 MR. MAGAZZU: No, nothing to add. We've 21 reviewed the draft resolution, and we're fully 22 satisfied with the same. 23 CHAIR KASSEKERT: Thank you. 24 Miss Flaherty? 25 MS. FLAHERTY: Good morning, Chair and 22 ITEM NO. 7 1 Commissioners. 2 You have our letter report dated April 3 the 21st with regard to Mr. Warga's 4 qualification. We have no objection to his 5 qualification, and we also are in agreement 6 with the draft resolution. 7 Thank you. 8 CHAIR KASSEKERT: Thank you. 9 Any questions? 10 COMMISSIONER SOMMELING: No questions, 11 Madame Chair. 12 Move to adopt the draft resolution and 13 find Bradley Warga qualified to serve as Vice 14 President of Talent and Employment Engagement 15 for Harrah's Entertainment, Inc., Harrah's 16 Operating Company, Inc. 17 COMMISSIONER FEDORKO: Second. 18 CHAIR KASSEKERT: The motion has been 19 made and seconded. This is a roll call vote. 20 MR. NANCE: Commissioner Fedorko? 21 COMMISSIONER FEDORKO: Yes. 22 MR. NANCE: Commissioner Sommeling? 23 COMMISSIONER SOMMELING: Yes. 24 MR. NANCE: Vice Chair Epps? 25 VICE CHAIR EPPS: Yes. 23 ITEM NO. 8 1 MR. NANCE: Chair Kassekert? 2 CHAIR KASSEKERT: Yes. 3 MR. NANCE: The record will reflect that 4 the motion is unanimous. 5 CHAIR KASSEKERT: Thank you. 6 MR. NANCE: Item No. 8, petition of 7 Harrah's Atlantic City Operating Company, LLC, 8 for approval to amend its casino license and 9 operation certificate. 10 MR. MONCRIEF: Good morning, Madame 11 Chair and members of the Commission. 12 Before you is a petition filed by 13 Harrah's to temporarily amend the operations 14 certificate in order to conduct a promotion for 15 the Kentucky Derby Day. 16 Here for the Petitioner is Mike Magazzu, 17 and for the Division Tim Ficchi. 18 CHAIR KASSEKERT: Thank you. 19 Mr. Magazzu? 20 MR. MAGAZZU: Good morning, Chair and 21 Commissioners. 22 We've reviewed the draft resolution and 23 are fully satisfied with the same. We 24 understand the conditions, and we have nothing 25 further. 24 ITEM NO. 8 1 CHAIR KASSEKERT: Thank you. 2 Mr. Ficchi? 3 MR. FICCHI: Yes. Again, good morning. 4 The Division's reviewed the draft 5 resolution and has no objection to its adoption 6 by the Commission. 7 Thank you. 8 CHAIR KASSEKERT: Thank you. 9 Any questions? 10 COMMISSIONER SOMMELING: No questions, 11 Madame Chair. 12 COMMISSIONER FEDORKO: Motion to adopt 13 the draft resolution and approve the petition 14 of Harrah's Atlantic City Operating Company, 15 LLC, for a temporary amendment to its 16 certificate of operation to permit the 17 reconfiguration of its gaming floor subject to 18 the conditions in the resolution. 19 VICE CHAIR EPPS: Second. 20 CHAIR KASSEKERT: The motion has been 21 made and seconded. All in favor? 22 (Ayes.) 23 CHAIR KASSEKERT: Opposed? 24 (No response.) 25 CHAIR KASSEKERT: Motion carries. 25 ITEM NO. 9 1 Thank you. 2 MR. MAGAZZU: Thank you. 3 MR. FICCHI: Thank you. 4 MR. MONCRIEF: Thank you. 5 MR. NANCE: Item No. 9, petition of 6 TotalUp, Inc., and Trump Marina Associates, 7 LLC, for approval of a "Total Craps" as a 8 variation of the authorized game of craps 9 pursuant to NJSA 5:12-5 and NJAC 19:47-8.4. 10 Mr. Briliant? 11 MR. BRILIANT: Good morning. Good 12 morning, Madame Chair and Commissioners. 13 On March 13th, 2009, TotalUp and Trump 14 Marina Associates filed a petition requesting 15 the approval of Total Craps, which is a 16 variation of the authorized game of craps. 17 This is a petition for rulemaking and, 18 therefore, is subject to Office of 19 Administrative Law rulemaking deadlines. And 20 the Commission has 60 days after the petition 21 was filed to either approve, reject, or table 22 the petition. That 60-day period will expire 23 on May the 12th. 24 The staff is still working on the 25 proposed regulations and viewing the table 26 ITEM NO. 10 1 setup and the layout and we are, therefore, 2 recommending that the matter be tabled for up 3 to 90 days, and you have our proposed notice of 4 action to that effect. 5 CHAIR KASSEKERT: Thank you. 6 Any questions for Mr. Briliant? 7 COMMISSIONER SOMMELING: No questions, 8 Madame Chair. 9 VICE CHAIR EPPS: Madame Chair, I move 10 that we table the petition for up to 90 days 11 and authorize the notice of action to that 12 effect. 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 MR. NANCE: Item No. 10, proposed 21 publication of amendments to NJAC 19:41-9.9, 22 19:42-8.5, 19:43-10.2, 10.4, 10.5 and 10.7, 23 19:51-1.2A, 1.2B, 1.5, 1.13 and 2.1; proposed 24 repeal of NJAC 19:41-5.11A. 25 Mr. Briliant? 27 ITEM NO. 10 1 MR. BRILIANT: Madame Chair and 2 Commissioners, this is a proposal which would 3 accomplish several things with regard to the 4 existing casino service industry regulations. 5 Number one, it would increase the dollar 6 thresholds and the fees that are presently in 7 the regulations. And right now the triggers 8 are $150,000 for business with one casino, 9 $500,000 for business with all casinos. That 10 would increase to 300,000 for one casino, 11 650,000 for all casinos. 12 We are also responding to a request from 13 the New Jersey Casino Association to streamline 14 certain CSI procedures and policies. And as 15 Mr. Nance indicated, we would be repealing the 16 requirement of a filing of a notice of 17 intention to conduct enterprise business which 18 is now required for a vendor who is in between 19 a thousand and $10,000 worth of business with 20 the casino. And the result would be that any 21 vendor who conducts less than $10,000 of 22 business per year, per casino would not have to 23 make the required NICE filing, would also be 24 exception from the vendor -- filing of a vendor 25 registration form. 28 ITEM NO. 10 1 Finally, we are also codifying certain 2 recent statutory amendments that were in the 3 bill sponsored by Senators Whelan and Van Drew, 4 primarily the new CSI licensing exemption for 5 the one-tenth of one percent of gross revenue 6 portion. 7 And I just want to take a moment to 8 thank Chris Storcella and his staff for helping 9 to fold in the repeal of the NICE requirement 10 and working out the codification of the new 11 exemption. They were extremely helpful in 12 getting this done and getting it on the agenda 13 in a prompt matter. 14 CHAIR KASSEKERT: Thank you. 15 Any questions for Mr. Briliant? 16 COMMISSIONER SOMMELING: Move to approve 17 for publication. 18 COMMISSIONER FEDORKO: Second. 19 CHAIR KASSEKERT: The motion has been 20 made and seconded. All in favor? 21 (Ayes.) 22 CHAIR KASSEKERT: Opposed? 23 (No response.) 24 CHAIR KASSEKERT: Motion carries. 25 MR. BRILIANT: Thank you. 29 ITEM NO. 11 1 MR. NANCE: Item No. 11, proposed 2 temporary adoption to amendments for "EZ 3 Baccarat," authorization of rulemaking 4 experiment for "EZ Baccarat" pursuant to NJSA 5 5:12-69e. 6 Mr. Mamolen? 7 MR. MAMOLEN: Madame Chair, 8 Commissioners, this is a matter before you for 9 temporary adoption of amendments and 10 regulations and authorization of a test for a 11 no vigorish variation of the authorized games 12 of baccarat and mini baccarat. In essence, the 13 only change to eliminate vigorish in these 14 games would be to deem a wager that wins for a 15 point count total -- a winning banker's hand 16 wager with a point count total of seven, and 17 that done with all three cards. So that would 18 be deemed a push, that wager. 19 All other procedures regarding the game 20 would be -- would be identical to what's 21 carried out now. There's a side wager on the 22 inverse of that which pays 41 and which 23 wagers -- you're, in essence, betting that that 24 result happens, that is, a winning banker's 25 hand happens with a point count of seven in 30 ITEM NO. 11 1 three cards. 2 CHAIR KASSEKERT: Thank you. 3 Any questions for Mr. Mamolen? 4 COMMISSIONER SOMMELING: No questions, 5 Madame Chair. 6 COMMISSIONER FEDORKO: Motion to 7 preliminarily approve "EZ Baccarat" as a no 8 vigorish variation of baccarat and mini 9 baccarat compatible with the public interest 10 pursuant to Section 5 of the Act; 11 B, authorize the publication of notice 12 of temporary adoption which will permit a test 13 of the new game variation to begin on or after 14 June 8th, 2009, subject to the conditions 15 listed and continuing for a period of time not 16 to exceed 270 days; 17 C, temporarily adopt the amendments 18 contained in the notice of proposal for the 19 purpose of conducting the test; 20 D, delegate to the Director of the 21 Division of Compliance the authority to 22 establish the terms and conditions of the test 23 of the new game variation; 24 E, condition any test of the new game 25 variation upon the filing with and the approval 31 ITEM NO. 12 1 by the Division of Compliance of all necessary 2 test submissions for a Section 90 -- 69e test 3 of new game variation; 4 And, F, further condition any test of 5 the new game variation upon the Licensing 6 Division deeming completed the casino service 7 industry application by DEQ Systems Corp.; 8 G, further condition any test of the new 9 game variation upon the filing of a "super C" 10 non gaming casino service industry license 11 application by the Talisman Group. 12 COMMISSIONER SOMMELING: Second. 13 CHAIR KASSEKERT: The motion has been 14 made and seconded. All in favor? 15 (Ayes.) 16 CHAIR KASSEKERT: Opposed? 17 (No response.) 18 CHAIR KASSEKERT: Motion carries. 19 MR. NANCE: Item No. 12, proposed for 20 temporary adoption of amendments and new rules 21 for Mini-Tex 3 Card Hold'Em, authorization of 22 rulemaking experiment for Mini-Tex 3 Card 23 Hold'Em pursuant to NJSA 5:12-69e. 24 Mr. Moncrief? 25 MR. MONCRIEF: Madame Chair, members of 32 ITEM NO. 12 1 the Commission, on March 10th of this year, 2 Score Jack Gaming and Trump Marina Association 3 filed a joint petition seeking the 4 authorization of the rulemaking experiment for 5 a new game called Mini Tex 3 Card Hold'Em. 6 The game is essentially a variation of 7 the traditional form of Texas Hold'Em, somewhat 8 simplified, where the players play against the 9 house, try to forming -- try to form the best 10 three-card hand they can between the two cards 11 they are dealt and the four community cards 12 that are dealt. 13 There is a pocket poker wager which is 14 basically a bonus wager the players can place 15 at the beginning of the hand, where if they 16 receive a predetermined hand, they receive a 17 pay-out based on odds that are posted on the 18 pay table on the table. 19 The players play against the house. 20 They do not play against each other. The 21 betting structure is similar to that used in 22 Let-it-Ride poker. 23 Unless you have any questions, I leave 24 the matter for you to consider the temporary 25 adoption of the amendments and the 33 ITEM NO. 12 1 authorization of the rulemaking experiments. 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 preliminarily approve Mini-Tex 3 Card 8 Hold'Em as a new game compatible with the 9 public interest pursuant to Section 5 of the 10 Act; 11 That we, B, authorize the publication of 12 the notice of temporary adoption which will 13 permit a test of Mini-Tex 3 Card Hold'Em to 14 begin in or after June 8th, 2009, subject to 15 the conditions listed and continuing for a 16 period of time not to exceed 270 days; 17 That we, C, temporarily adopt the 18 amendments contained in the notice of proposal 19 for the purpose of conducting the test; 20 That we, D, delegate to the Director of 21 the Division of Compliance the authority to 22 establish the terms and conditions of a test of 23 Mini-Tex 3 Card Hold'Em and approve any gaming 24 equipment necessary for the implementation of 25 the test; 34 ITEM NO. 13 1 And, E, condition any test of Mini-Tex 3 2 Card Hold'Em upon the filing with and approval 3 by the Division of Compliance of all necessary 4 test submissions for a Section 69e test of 5 Min-Tex 3 Card Hold'Em. 6 COMMISSIONER SOMMELING: Second. 7 CHAIR KASSEKERT: The motion has been 8 made and seconded. All in favor? 9 (Ayes.) 10 CHAIR KASSEKERT: Opposed? 11 (No response.) 12 CHAIR KASSEKERT: Motion carries. 13 MR. MONCRIEF: Thank you. 14 MR. NANCE: Item No. 13, proposed 15 adoption of amendments to NJAC 19:45-1.54. 16 Mr. Moncrief? 17 MR. MONCRIEF: Madame Chair, members of 18 the Commission, before you is the proposed 19 adoption to amendments to NJAC 19:45-1.54. 20 These amendments were approved for publication 21 by the Commission on December 10th, 2009. They 22 were published in the New Jersey Register on 23 January 20th, and the period for public comment 24 ended on March 21st. No public comments were 25 received. 35 ITEM NO. 15 1 The proposal proposes amendments to the 2 regulations which would address the residual 3 amount on the gaming voucher which cannot be 4 converted into credits to be gambled on a slot 5 machine. 6 Unless you have any questions, I leave 7 the adoption for your consideration. 8 CHAIR KASSEKERT: Thank you. 9 Any questions? 10 COMMISSIONER SOMMELING: Madame Chair, 11 move to adopt as publish. 12 COMMISSIONER FEDORKO: Second. 13 CHAIR KASSEKERT: The motion has been 14 made and seconded. All in favor? 15 (Ayes.) 16 CHAIR KASSEKERT: Opposed? 17 (No response.) 18 CHAIR KASSEKERT: Motion carries. 19 MR. MONCRIEF: Thank you. 20 CHAIR KASSEKERT: Thank you. 21 MR. NANCE: For your consideration, Item 22 No. 15, consideration of the applications of 23 the Trustee and Conservator for the former 24 casino licensee, Adamar of New Jersey, Inc., 25 for approval of fees for the Conservator/ 36 ITEM NO. 15 1 Trustee, his personal counsel, legal, and other 2 consultants. 3 Miss Fauntleroy? 4 MS. FAUNTLEROY: Yes, good morning. 5 There are several invoices that are 6 presented for your consideration, covering the 7 period April 1 through April 4. 8 There is a representation that exists by 9 way of previous order, you authorized for 10 retainers for purposes of the anticipated 11 bankruptcy filing, and any additional amounts 12 that would be incurred between now and the 13 filing of the potential bankruptcy action would 14 be addressed through those retainer processes. 15 We have before us Sean Mack on behalf of 16 the Conservator as well as Mary Jo Flaherty on 17 behalf of the Division. 18 CHAIR KASSEKERT: Thank you. 19 Good morning, Mr. Mack. 20 MR. MACK: Good morning, Chair, 21 Commissioners. 22 You have our invoices, the invoices of 23 the professionals, and as well as just ask 24 there was an open issue on the prior Debevoise 25 invoice. We also ask you to consider that 37 ITEM NO. 15 1 today. 2 And I'll be happy to answer any 3 questions you have about the invoices. 4 CHAIR KASSEKERT: Thank you. 5 Like to hear from Miss Flaherty, first? 6 Miss Flaherty? 7 MS. FLAHERTY: Yes, Chair. 8 We reviewed the April invoices, and we 9 had some follow-up questions for Mr. Mack with 10 regard to that, and he's provided us with 11 information to satisfy our inquiries. 12 So based on that at this time, we leave 13 to the Commission's discretion the approval of 14 the April invoices, subject to the continued 15 compliance with financial condition with the 16 $19 million cash reserve balance. 17 I don't know if you want me to address 18 the prior Debevoise invoices at this time 19 or not. 20 CHAIR KASSEKERT: Sure. Why don't you 21 go ahead. 22 MS. FLAHERTY: Okay. With regard to 23 that, in November of last year, there was a 24 proceeding, and as a result of that proceeding, 25 the Division recommended to the Commission that 38 ITEM NO. 15 1 with regard to Debevoise's services that the 2 amount and nature of the work performed being 3 circumscribed by guidelines. And in that 4 regard, we were advised that there would be M 5 and A work primarily by Carl [sic] Pasewark, 6 and it was indicated that Debevoise's 7 involvement would be very limited with the 8 bankruptcy. With regard to that, when we 9 received certain of the billings in terms of 10 retainers and conflict charges for the upcoming 11 bankruptcy, they were quite large. 12 It's my understanding at this point that 13 by letter dated March 27th of this year, 14 Debevoise has indicated that it would be in 15 agreement with the disallowance of $70,819.50 16 in conflict billings, but they are pursuing 17 $19,858.46 in retention costs. And an 18 additional $23,249 -- $23,249.76 in retention 19 and conflict charges from February. Our point 20 with this is that if the bankruptcy involvement 21 was going to be limited, these charges seem to 22 be excessive in light of that limited 23 bankruptcy involvement. 24 At this point, they have agreed with the 25 disallowance of a substantial amount of that 39 ITEM NO. 15 1 cost. In our view, this was really a matter 2 that should have been brought to the regulatory 3 authorities beforehand in light of the 4 extensiveness of the billings that were 5 anticipated. And it was something that we 6 probably should have considered beforehand. 7 And, in our view, Debevoise acted at their own 8 risk in that regard. But in light of their 9 agreement with the disallowance, we will not 10 object at this point in time. 11 We leave to your discretion the approval 12 of these invoices in an amount of no more than 13 the $43,108.22 which Debevoise is continuing to 14 seek. And that, of course, is again subject to 15 the continuation of $19 million in the cash 16 reserve balance pursuant to the financial 17 conditions and compliance with those. 18 We would also ask that there be a 19 representation that those additional costs 20 which would be disallowed would not be pursued 21 in the bankruptcy context as administrative 22 costs. 23 And with that, we leave it to your 24 discretion. Thank you. 25 CHAIR KASSEKERT: Thank you. 40 ITEM NO. 15 1 Let me ask if there are any questions? 2 COMMISSIONER SOMMELING: I have no 3 questions. 4 CHAIR KASSEKERT: Commissioner Epps? 5 VICE CHAIR EPPS: No. I don't have any 6 questions, but I'll make the motion. 7 CHAIR KASSEKERT: Okay. 8 MS. FAUNTLEROY: If I may. 9 CHAIR KASSEKERT: Sure. 10 MS. FAUNTLEROY: There's a correction. 11 It did not make it to the final number. The 12 Cole Schotz bill for that period is minus $94, 13 so the total amount sought is 94,653.37. 14 CHAIR KASSEKERT: Thank you. 15 Commissioners Epps? 16 VICE CHAIR EPPS: Madame Chair, with 17 that, I move that we approve the following 18 invoices: A, for the Conservator/Trustee 19 Stein's for a period of April 1st through April 20 24th, 2009, in the amount of $37,440; 21 B, Pashman Stein for the period April 1 22 through April 24, 2009, in the amount of 23 $52,504.25; 24 C, Cole Schotz for the period April 1 25 through April 27, 2009, in the amount of 41 ITEM NO. 15 1 $94,653.37; 2 D, Debevoise & Plimpton for the period 3 April 1 through April 24, 2009, in the amount 4 of $224,836.48; 5 E, JH Cohn for the period April 1 6 through April 24, 2009, in the amount of 7 $100,603.25; 8 F, I would move as part of this motion 9 an additional 19,858.46 from the January 8 10 invoice with the express directive that any 11 disallowed amounts not be presented to the 12 bankruptcy court as an administrative expense 13 or otherwise, thereby rejecting the additional 14 23,249.76 that was also sought inasmuch as that 15 should have been moved in another matter 16 brought before us seeking reimbursement for 17 that. So I move that we disallow that portion, 18 and we allow the previously stated 19,000. So 19 that would be my full motion. 20 COMMISSIONER SOMMELING: Second. 21 CHAIR KASSEKERT: I think also, too, you 22 need to put on the record that this is subject 23 to the conditions. 24 VICE CHAIR EPPS: Oh, I'm sorry. All of 25 the those payments -- 42 ITEM NO. 14 1 CHAIR KASSEKERT: Right. 2 VICE CHAIR EPPS: -- would be subject to 3 the conditions imposed in Commission Regulation 4 No. 08-06-04-15 and 08-06-18-21, including the 5 provision of daily cash schedules and updated 6 forecasts. 7 COMMISSIONER SOMMELING: Second. 8 CHAIR KASSEKERT: The motion has been 9 made and seconded. All in favor? 10 (Ayes.) 11 CHAIR KASSEKERT: Opposed? 12 (No response.) 13 CHAIR KASSEKERT: Motion carries. 14 We'll take a brief recess now to prepare 15 for Item 14. 16 (A recess was taken from 11:09 to 11:24 17 a.m.) 18 CHAIR KASSEKERT: Thank you. We'll go 19 back on the record. 20 MR. NANCE: Item No. 14, amended joint 21 petition of the Trustee and Conservator of 22 Adamar of New Jersey, Inc., et al. to extend 23 the sale period, approve an asset purchase 24 agreement, and authorize a bankruptcy filing. 25 Mr. DiGiacomo? 43 ITEM NO. 14 1 MR. DiGIACOMO: Chair, Commissioners, 2 good morning. 3 If counsel would be kind enough to enter 4 their appearances for the record. 5 MR. MACK: Good morning, Chair, 6 Commissioners. Sean Mack with Pashman Stein on 7 behalf of the Trustee/Conservator. 8 MR. O'GARA: Paul O'Gara, Tropicana 9 Entertainment. 10 MR. BROOKS: Good morning, Madame Chair. 11 Gil Brooks of Duane Morris on behalf of the 12 Secured Lenders. 13 CHAIR KASSEKERT: Good morning. Thank 14 you. 15 Let me make a few introductory, remarks. 16 Last month the Commission extended until 17 April 30th the deadline by which Justice Stein 18 was to dispose of Adamar's property for the 19 purpose of Subsection 95.14b of the Act. 20 Throughout the process, our attention has been 21 called to the free and clear sale provisions of 22 Section 363 of the Federal Bankruptcy Code and 23 whether a so-called stalking horse under those 24 provisions might emerge. At long last I'm 25 please to say one seemingly has. Thus, Justice 44 ITEM NO. 14 1 Stein and the Steering Committee of the Secured 2 Lenders as joint petitioners seek Commission 3 approval for the final form of the asset 4 purchase agreement, APA, which if it garners 5 our approval, will be the template for the 6 lenders essentially to make a credit bid to 7 serve as a stalking horse in bankruptcy. 8 In pursuit of that application, we'll 9 take testimony today. Before doing so there 10 are also several exhibits that have been 11 premarked and that Mr. Nance will now identify 12 for the record. 13 MR. NANCE: The Division of Gaming 14 Enforcement has one exhibit. D-1 is the report 15 dated April 22, 2009, regarding Petition No. 16 0750903. 17 The petitioners, the Joint Petitioners, 18 has three exhibits. They were premarked JP-1 19 through JP-3. JP-1 is a form of asset purchase 20 agreement and bidding procedures and exhibits 21 dated April 17th. JP-2 is a letter dated April 22 28th, 2009, from Damien Zoubek -- 23 MR. BROOKS: Zoubek 24 MR. NANCE: -- to Gil Brooks. Thank 25 you. 45 ITEM NO. 14 1 Regarding Tropicana initial required 2 approval. 3 And JP-3 is a letter dated April 28th, 4 2009, from Mark Broude. 5 MR. BROOKS: Broude. 6 MR. NANCE: Broude. Thank you. 7 To Justice Gary Stein regarding petition 8 to sell assets of Adamar pursuant to Section 9 363 of the bankruptcy code. 10 CHAIR KASSEKERT: Thank you. 11 Let me just mention. Mr. Adams, I 12 neglected to allow you to enter your 13 appearance. Let me do so right now. Last time 14 I called you Mr. Fogarty. Today I skipped 15 right over you. 16 MR. ADAMS: Jack Adams for the Division 17 of Gaming Enforcement. 18 Thank you, Chair. 19 CHAIR KASSEKERT: Thank you. 20 Are the are there any objections to the 21 admission of these exhibits? And are there any 22 sealing requests? 23 MR. BROOKS: There is a sealing request, 24 Madame Chair, in connection with two of the 25 exhibits, the asset purchase agreement, the 46 ITEM NO. 14 1 execution draft of the asset purchase 2 agreement. And you're getting copies of them. 3 That has an Exhibit G to it. And we would 4 request sealing in connection with the figures 5 that are in Exhibit G. The copies you have 6 have -- are redacted to reflect the sealing 7 request. 8 Also, with respect to JP-2, Joint 9 Petitioner 2, a letter from Mr. Zoubek, there 10 are some figures in there that have been 11 redacted. Those are figures that are -- relate 12 to the auction and are proprietary, and we 13 would ask for sealing in connection with those. 14 CHAIR KASSEKERT: Thank you. 15 Mr. Mack? 16 MR. MACK: And I would also request that 17 the disclosure letter attached to it which is 18 part of JP-1 also be sealed as that contains, 19 basically, the financial information about the 20 assets and all the employees that will be 21 incorporated into the sale. 22 CHAIR KASSEKERT: Thank you. 23 Mr. O'Gara? 24 MR. O'GARA: We have no objection to the 25 sealing. 47 ITEM NO. 14 1 CHAIR KASSEKERT: Thank you. 2 Mr. Adams? Is there any -- 3 MR. ADAMS: No objection with respect to 4 any exhibits going in. We leave the sealing 5 request to your discretion, but we have no 6 objection to those. 7 CHAIR KASSEKERT: Thank you. 8 MR. DiGIACOMO: Chair, if I may? 9 CHAIR KASSEKERT: Yes. 10 MR. DiGIACOMO: The draft resolution 11 provides for the sealing of most of the 12 documents that have been referred to. It does 13 not address JP-2, but I don't see as Commission 14 staff counsel any objection to granting that 15 request and incorporating that into the request 16 as well. 17 CHAIR KASSEKERT: Okay. Very well. 18 MR. DiGIACOMO: While we're on the draft 19 resolution, at Page 7, Paragraph 4, the ninth 20 line down that begins "The Act," it should 21 probably read "The Act and its underline 22 policies." 23 CHAIR KASSEKERT: So noted. We'll 24 correct that on the record. 25 Since it's part of the resolution, I 48 ITEM NO. 14 1 don't need to make a separate ruling on the 2 sealing request. 3 MR. DiGIACOMO: That's correct, Chair. 4 CHAIR KASSEKERT: Let me ask if there 5 are any other procedural matters that need to 6 be brought to our attention at this time? 7 MR. BROOKS: Madame Chair, we could deal 8 with this. We probably should deal with it 9 now. There are -- there were that changes to 10 the asset purchase agreement from the time it 11 was filed on April 17th to the present time -- 12 time period. Those changes were very minor, 13 but I could take the Commission through those 14 so if that you see those, and I think that way 15 we can move forward with the document as it 16 exists today. 17 And if I could approach, I have 18 documents for the purpose of the binders and 19 documents which explain the changes for each of 20 the Commissioners. 21 CHAIR KASSEKERT: Thank you. 22 Why don't you give them to Mr. Nance 23 and -- 24 MR. BROOKS: These are all incorporated 25 in JP-1. 49 ITEM NO. 14 1 CHAIR KASSEKERT: In JP-1. Okay. 2 MR. BROOKS: These are just separate. 3 CHAIR KASSEKERT: Just separate. 4 MR. BROOKS: They are separate. They 5 match up with the binders that were previously 6 provided to the Commission and also a letter 7 that basically explains the changes. And I'll 8 just go through that and you can -- 9 CHAIR KASSEKERT: Thank you. 10 MR. NANCE: Mr. Brooks, if I may make a 11 correction to one of the -- JP-1 should have 12 been dated April 29th is the correct date for 13 the identification of that document. 14 MR. BROOKS: Okay. 15 MR. ADAMS: Instead of April 17th. 16 MR. BROOKS: Yeah. April 17th -- 17 MR. O'GARA: Correct. 18 MR. BROOKS: -- is the binders that have 19 been previously provided to the Commission. 20 MR. NANCE: Yes. 21 MR. BROOKS: And JP-1 is dated April 22 29th. 23 CHAIR KASSEKERT: Thank you. 24 MR. BROOKS: They don't have to be 25 marked. Those documents are just for the 50 ITEM NO. 14 1 Commission. They are all incorporated into 2 JP-1. 3 CHAIR KASSEKERT: 1, already. 4 MR. BROOKS: They just go to the 5 Commissioners for the purposes of -- 6 MR. NANCE: Okay. 7 CHAIR KASSEKERT: Purpose of killing 8 some more trees. 9 MR. BROOKS: Yeah. They actually should 10 be handed for Commission right now if you don't 11 mind. 12 CHAIR KASSEKERT: Okay. 13 MR. BROOKS: So they can go through the 14 changes. 15 Madame Chair, there is a cover letter 16 that covers all the things that I'm going to 17 address, but the first document on top of the 18 package is a black-line version of the asset 19 purchase agreement, but only the relevant 20 portions that have been changed to get to the 21 execution draft which is now JP-1. 22 There's the date change that you see on 23 the front page. There were page number changes 24 as a result of footnotes that were previously 25 in the document being moved. Those are no 51 ITEM NO. 14 1 longer relevant. They were removed, but they 2 changed the page paginations, which is why the 3 Commission was given a full execution copy to 4 plug into the binders that were given to you on 5 April 17th. They are hole-punched. They can 6 simply be plugged in at your leisure. 7 There were three changes to the body of 8 the document. The changes -- there also is a 9 date change on the first page of the asset 10 purchase agreement. There was a change in the 11 language of Section 2.2. It had previously 12 read in the middle of that paragraph each of 13 the Tropicana parties "acknowledge and agree," 14 and it just was changed to "acknowledges and 15 agrees." That's on Page 26 of the asset 16 purchase agreement. 17 There was a change on Page 29, and in 18 that Subparagraph J, which is towards the 19 bottom third of the page, it had read, "The 20 aggregate amount of fines, penalties, and fees 21 due and payable by the company to the 22 Commission." And then later on in the last 23 clause of paragraph, it had only read "payment 24 of such fines and penalties." And it was 25 changed to read "such fines, penalties, and 52 ITEM NO. 14 1 fees," to make it consistent with the provision 2 at the beginning of that subparagraph. 3 And I show you the other pages that I 4 have the footnotes being removed. The next two 5 pages. 6 And then, lastly, with respect to 7 Section 7.1c(2), there's a reference to Section 8 543b of the bankruptcy code, and then we added 9 "to the extent applicable," because that is an 10 issue with respect to -- that will be resolved 11 in the bankruptcy court, i.e., the 12 applicability of Section 543. 13 And if you have those changes, and 14 that's now reflected in the execution draft you 15 have of both JP-1 and the insert you can put 16 into your binders on April 17th. 17 The next document is the black-line copy 18 of the annex, and what I did here is just keep 19 the -- they are the exact same changes that 20 were made to the asset purchase agreement 21 itself. As you are aware, Annex A is the 22 third-party bidder -- former third-party bidder 23 asset purchase agreement. But any interested 24 third-party bidder would have to agree to as 25 part of the procedures. So all the changes I 53 ITEM NO. 14 1 just outlined were incorporated into that 2 document as well. The pages are a little bit 3 different because of the pagination, but that 4 covers that document. 5 And then there were two exhibits to the 6 asset purchase agreement, Exhibit J and K. 7 Exhibit J was the bidding procedures order that 8 will potentially and hopefully be signed by the 9 bankruptcy court. And Exhibit K were the 10 bidding procedures themselves. 11 Exhibit J, they were initially part the 12 asset agreement that we submitted on April 13 17th. They had to be changed to make them 14 consistent with the asset purchase agreement, 15 and at the time of the submission on the 17th, 16 we had neglected to make those changes -- a 17 couple of those changes. And really it was 18 just the inclusion of collective bargaining 19 agreements and some other stylistic changes, 20 none of which were meaningful at all. But we 21 made those changes separate from what I have 22 given the Commission. I didn't bother to give 23 it to Commission, but I gave it to all the 24 attorneys. I took -- I gave them a progression 25 of the black-line versions of those two 54 ITEM NO. 14 1 exhibits that got us through to the execution 2 draft, which is contained at J and K now in 3 JP-1. Again, these changes were just stylistic 4 to make those exhibits consistent with the 5 asset purchase agreement, specifically, really, 6 on the inclusion of -- the definitive inclusion 7 of collective bargaining agreements as part of 8 the acquired assets. 9 And, again, just a couple of stylistic 10 changes and things, but nothing substantial at 11 all. So those were the changes that have been 12 made since April 17th to the relevant 13 documents. 14 CHAIR KASSEKERT: Thank you. 15 Mr. Adams, any objection? 16 MR. ADAMS: My only observation -- and I 17 believe Mr. Brooks had addressed them is that 18 no substantive -- 19 CHAIR KASSEKERT: Right. 20 MR. ADAMS: -- changes were made to 21 those last two exhibits that he just talked 22 about. It was more stylistic and make it 23 consistent with the provisions that he already 24 made reference to, and we are relying on that. 25 CHAIR KASSEKERT: Thank you. Okay. 55 ITEM NO. 14 1 We are now set for opening statements, 2 which the parties may waive and elect instead 3 to proceed directly to testimony. 4 Counsel, what's your preference? 5 Mr. Mack? 6 MR. MACK: I think we'll waive. 7 MR. BROOKS: We'll waive, Madame Chair. 8 CHAIR KASSEKERT: Mr. Brooks? Yeah. 9 Mr. Adams? 10 MR. ADAMS: As well. 11 CHAIR KASSEKERT: Okay. Very good. 12 Counsel, please call your first witness. 13 MR. MACK: Yeah. I guess I think the 14 best way to do this, I know you Commissioners 15 have already read this voluminous record before 16 you. 17 CHAIR KASSEKERT: Yes. 18 MR. MACK: And rather than me telling 19 you what it already says in there, I know 20 you've read it, and I'll start with Kyle 21 Pasewark, who is from Debevoise & Plimpton, a 22 New York licensed attorney, and he led the 23 negotiation on behalf of Justice Stein. So I 24 would ask Kyle to take the stand. And I don't 25 have any questions for him. I'll just make him 56 ITEM NO. 14 1 available to the Commission and to the 2 Division. 3 CHAIR KASSEKERT: Okay. 4 Let me ask if any of the other 5 parties -- before we have the Division ask 6 questions first? Any of the other parties have 7 questions? 8 MR. O'GARA: No. We have no questions. 9 CHAIR KASSEKERT: Mr. Adams, any 10 questions? 11 MR. ADAMS: I just have a couple of 12 questions. 13 CHAIR KASSEKERT: Sure. 14 MR. ADAMS: Mr. Pasewark, excuse me, am 15 I pronouncing your name? 16 CHAIR KASSEKERT: Oh, we need to swear 17 him in. 18 19 KYLE A. PASEWARK, was duly sworn to 20 testify in this matter. 21 22 MR. NANCE: Please state your name for 23 the record. 24 MR. PASEWARK: Kyle Pasewark. 25 MR. NANCE: Please spell your last name 57 ITEM NO. 14 1 for the record. 2 (Laughter.) 3 MR. PASEWARK: P-a-s-e-w-a-r-k. 4 MR. NANCE: Thank you very much. 5 CHAIR KASSEKERT: Thank you. 6 You may proceed, Mr. Adams. 7 MR. ADAMS: Thank you. 8 9 CROSS-EXAMINATION BY MR. ADAMS: 10 Q. My first question is just directed to 11 any portions of the APA which you relate to gaming 12 approvals. You were involved in drafting those on 13 behalf of the Trustee/Conservator; is that correct? 14 A. I was in conjunction with Pashman Stein. 15 Q. In conjunction with Pashman Stein. 16 And are you satisfied that those terms 17 as they now are contained in the APA are satisfactory, 18 from your perspective? 19 A. Yes. 20 Q. And do you construe those in any way as 21 attempting to abrogate or change or modify any 22 provisions in the Casino Control Act which might be 23 applicable to any buyer who is successful with respect 24 to this acquisition? 25 A. I do not. 58 ITEM NO. 14 1 MR. ADAMS: Thank you. That's all I 2 have, Madame Chair. 3 CHAIR KASSEKERT: Thank you. 4 Let me ask if any of the Commissioners 5 have questions? 6 VICE CHAIR EPPS: No. 7 COMMISSIONER SOMMELING: No questions, 8 Madame Chair. 9 CHAIR KASSEKERT: Commissioner Fedorko? 10 Thank you. You may step down. 11 MR. PASEWARK: Thank you. 12 CHAIR KASSEKERT: You may call your next 13 witness, Mr. Mack. 14 MR. MACK: The next person I would like 15 to call up is Michael Sirota. He's the 16 co-chair of the Cole Schotz bankruptcy group 17 and is Adamar's bankruptcy counsel. 18 He's a New Jersey licensed attorney, so 19 I don't how -- if you want to put him on the 20 stand or just have him make a presentation. 21 CHAIR KASSEKERT: Yeah. I don't think 22 we need to put him on the stand since he's 23 licensed in New Jersey so -- 24 MR. SIROTA: Madame Chair, 25 Commissioners, good morning. 59 ITEM NO. 14 1 I think the purpose of my presentation 2 is to walk the Commission through the next 3 steps, assuming that a resolution is passed. 4 Assuming the resolution and the joint petition 5 is granted, we would begin the process after 6 Justice Stein authorizes the Chapter 11 filings 7 to initiate those filings electronically. 8 We're scheduled to do that this afternoon. 9 Bankruptcy judge will be assigned. 10 We'll be requesting of the Court today 11 an interim order regarding payroll as well as 12 an order scheduling what's referred to as 13 first-day hearings. Hopefully, those first-day 14 hearings, subject to the Court's schedule, will 15 be heard May 1st, you know, probably sometime 16 in the a.m. At which time the Court will go 17 through all the applications that will 18 stabilize the Tropicana Casino while it enters 19 Chapter 11 to make sure that all ordinary 20 course obligations are paid and that all of the 21 customer relations are continued uninterrupted. 22 So the journey into Chapter, assuming all 23 things go well, which we anticipate, should be 24 a non event. 25 At or prior to that May 1st hearing, we 60 ITEM NO. 14 1 would present to the Court the documents that 2 are before you. Basically, the asset purchase 3 agreement as well as an application seeking to 4 commence the sale process. And we'll ask the 5 Court to entertain the bidding procedures order 6 within seven days of our filing of the sales 7 documents, which would bring us to on or about 8 May 8th. And thereafter you have the schedule 9 that sets forth exactly how the sale process 10 will unfold. They'll be the opportunity for 11 competitive bids to be submitted. If 12 competitive bids are submitted, there will be 13 an auction. Depending upon the results of the 14 auction, of course, there will be ultimately a 15 sale hearing at which time the Court would 16 approve the highest and best bid, and 17 thereafter we would work towards a closing 18 pursuant to the various regulations and, of 19 course, the authority under the Act. 20 So that, basically, will be the Chapter 21 process at the outset. I know the draft 22 resolution anticipates periodic reporting to 23 the Commission, and we look forward to 24 providing those updates, you know, as 25 appropriate. 61 ITEM NO. 14 1 CHAIR KASSEKERT: Thank you. 2 Do any of the Commissioners have 3 questions? 4 Commissioner Epps? 5 VICE CHAIR EPPS: I have a question. In 6 the event that there is a -- that there are 7 participants in the bid/auction portion of this 8 process and someone else is successful, is 9 there another APA that has to be prepared for 10 that party that we would go through the whole 11 process of back and forth with respect to 12 preparing another such document? 13 MR. SIROTA: There's a form APA that's 14 been prepared for a competitive bidder. 15 VICE CHAIR EPPS: Okay. That's what -- 16 MR. SIROTA: What would happen is a 17 competitive bidder would probably take that 18 form and undoubtedly mark it up and provide us 19 with a black-line version. It would be that 20 black-line version that then the parties would 21 have to consider, and I assume the Commission 22 would have to consider and approve to make sure 23 it was compliant with the regulations and that 24 you were satisfied that it were appropriate. 25 Only after that would take place would we 62 ITEM NO. 14 1 present it back to the bankruptcy court for 2 ultimate approval. 3 VICE CHAIR EPPS: Now, would there be 4 any time sensitivity with respect to 5 preparation and completion of a -- another APA 6 if that were to be the ultimate course? 7 MR. SIROTA: In order to stay on 8 schedule, we've prepared the form APA that we 9 expect buyers, in order to be compliant with 10 our bidding procedures, to adopt. So there 11 shouldn't be any delay whatsoever. We've built 12 in some flex time into the schedule to the 13 extent that there would be an alteration that 14 would require us to come back here or have to 15 proceed in some other fashion. 16 VICE CHAIR EPPS: Now, any party 17 interested would have the opportunity to see 18 that ahead of time so going into the bid, they 19 would know what those documents look like. So 20 they would have an idea, if that were something 21 they would engage in as they move forward. Is 22 that accurate? 23 MR. SIROTA: Yes. And Mr. Mack is 24 suggesting that JP-1 Annex A is that form, 25 competitive APA. 63 ITEM NO. 14 1 VICE CHAIR EPPS: Okay. Okay. So any 2 potential bidder would have access to that 3 form, and they can begin the process of 4 reviewing it for their own -- 5 MR. SIROTA: The process will be open to 6 anybody that's interested. And assuming that 7 they qualify under the qualified bid definition 8 and the documents before you, they'll be 9 allowed to participate. And go forward with at 10 least their version of the APA subject to all 11 of the protections built into the procedures. 12 VICE CHAIR EPPS: Okay. I just -- we 13 just -- the whole concept of another APA 14 process was a bit frightening, so I just wanted 15 to understand where that would go that would -- 16 MR. SIROTA: Which is why we prepared 17 the form and its before you so that we wouldn't 18 have to start this exercise from square one. 19 VICE CHAIR EPPS: Thank you for that. 20 CHAIR KASSEKERT: Any other questions? 21 COMMISSIONER FEDORKO: I have one 22 question. 23 CHAIR KASSEKERT: Sure. Commissioner 24 Fedorko? 25 COMMISSIONER FEDORKO: Mr. Sirota, in 64 ITEM NO. 14 1 your experience, could you give us some kind of 2 estimate how long -- how long this all is going 3 to take? 4 MR. SIROTA: I think the time line that 5 we outlined for the conclusions of the auction 6 and sale process in or about mid to the end of 7 June is realistic. I say that understanding 8 that, you know, I report to the higher 9 authority of a bankruptcy judge who, of course, 10 reserves the right to adjust that schedule. 11 But my experience is, in that we have a 12 consensual arrangement with the lenders as well 13 as with the bondholders that this should be a 14 fairly smooth sale, and we don't anticipate any 15 substantial deviation from the time line before 16 you. 17 COMMISSIONER FEDORKO: Thank you. 18 CHAIR KASSEKERT: Any other questions? 19 COMMISSIONER SOMMELING: No other 20 questions. 21 CHAIR KASSEKERT: Mr. Adams? Do you 22 have any questions? 23 MR. ADAMS: No, I don't. 24 CHAIR KASSEKERT: Okay. Thank you very 25 much for your presentation, Mr. Sirota. 65 ITEM NO. 14 1 MR. SIROTA: Thank you. 2 CHAIR KASSEKERT: Mr. Mack? 3 MR. MACK: Madame Chair, I'd just like 4 to address two issues briefly. 5 CHAIR KASSEKERT: Sure. 6 MR. MACK: And then I'll ask Mr. Justice 7 Stein make a statement, which will effectively 8 be in lieu of any closing by me. 9 CHAIR KASSEKERT: Okay. 10 MR. MACK: Based on the time line, the 11 bankruptcy time line, as Mr. Sirota said, a 12 couple of months to complete the bankruptcy 13 sale process. In Exhibit 5 to our original 14 joint petition, we then laid out the rest of 15 the time line, which takes into account the 16 licensing process. 17 CHAIR KASSEKERT: Uh-hum. 18 MR. MACK: And the statutory requirement 19 that a closing not be set sooner than 121 days 20 after the completed ICA application is 21 submitted. So when you add on that licensing 22 component to it, that will end up pushing the 23 closing back possibly to the end of this year. 24 The APA currently reflects that as the outside 25 date for closing. And we have, therefore, made 66 ITEM NO. 14 1 a request that the sale period also be extended 2 to end of the year to allowing the licensing 3 also to be completed and hopefully, finally, 4 have one last extension and finally be done 5 with this process. 6 The other issue I just want to address 7 with you is in an April 6th filing, we also 8 requested specific authorization for Justice 9 Stein to authorize Adamar to make a motion to 10 the bankruptcy court to seek approval of what 11 they call "cash collateral order." And that's 12 necessary to enable Adamar to continue using 13 all of its cash during the bankruptcy process, 14 which everybody wants them to be able to do. 15 We've submitted the form of that to the 16 Commission and to the staff, and we would just 17 ask that any resolution you issue today include 18 authorization to enter into that order. 19 CHAIR KASSEKERT: Thank you. 20 MR. MACK: With that, unless there are 21 questions, I'll ask Justice Stein to make a 22 statement. 23 CHAIR KASSEKERT: Thank you. 24 Justice Stein? 25 JUSTICE STEIN: Good morning, Madame 67 ITEM NO. 14 1 Chair, Commissioners. 2 CHAIR KASSEKERT: Good morning. 3 JUSTICE STEIN: You will recall I was 4 much younger when I began this. 5 (Laughter.) 6 CHAIR KASSEKERT: We all were. 7 (Laughter.) 8 JUSTICE STEIN: I did want to comment 9 before I begin my statement that, although this 10 asset purchase agreement and the exhibits are 11 very complex documents, I personally have a 12 fair degree of familiarity with what's in them 13 as do the lawyers that worked on my behalf, and 14 I want to represent to the Commissioners and 15 assure them that the negotiations were fair but 16 vigorous, and that, in my judgment, the 17 interests of the casino that you regulate has 18 been very well protected and taken into account 19 in these negotiations. And I'm satisfied with 20 the content of the agreement and the exhibits 21 and satisfied that the proposal that we have 22 before you to ask for approval of the agreement 23 and ask for authorization to file a bankruptcy 24 petition solely for the purpose of selling the 25 assets free and clear of all liens is in the 68 ITEM NO. 14 1 best interest of the regulated casino. 2 I guess what I'd also like to add is 3 that, from my perspective, today's hearing is a 4 very significant milestone in your effort 5 through the conservatorship to ensure that the 6 casino's ownership meets the high standards 7 that are envisioned by the Act. As I think you 8 and everybody involved in this process 9 understands, our efforts to find an appropriate 10 buyer for the casino were effected by an almost 11 unbelievable combination of events. You may 12 recall that it was last March, March of 2008, 13 when we received our first bids, and that was 14 the day that the financial community learned 15 that Bear Stearns had collapsed, and of course, 16 coincidentally, our advisor in the first sale 17 process was Bear Stearns. And despite their 18 financial difficulties, Ken Shea and his staff 19 did a superb job in a very difficult 20 environment. 21 While those original bids were being 22 evaluated, the sale process was destabilized by 23 the bankruptcy filing of the former owner, 24 Tropicana Entertainment. So much so that, if 25 you recall, everyone agreed, the lenders, my 69 ITEM NO. 14 1 advisors, and eventually the Commission, that a 2 new sale process should be instituted. And so 3 last summer we engaged Moelis & Company who 4 conducted a vigorous sales effort, and we 5 received a second round of bids, as I recall, 6 on September 17th -- September 15th, I think -- 7 the very day that the world learned that Lehman 8 Brothers had collapsed and that Merrill Lynch 9 was being acquired by Bank of America. And in 10 spite of that, we got a significant series of 11 bids. The strongest one was from Cordish & 12 Company, and we began negotiations with Cordish 13 last fall. And, once again, while those 14 negotiations were under way, we were surprised 15 because the New Jersey Supreme Court 16 unexpectedly granted a petition for 17 certification to hear the appeal from the 18 denial of the licensure of the former owner. 19 And as a result our, negotiations with the 20 Cordish Company were suspended probably for six 21 weeks. 22 When those negotiations faltered, I 23 began discussions with the senior lenders and 24 led by their Steering Committee and Latham 25 Watkins, its counsel, as well as counsel for 70 ITEM NO. 14 1 Credit Suisse, the lender's agent, and counsel 2 for the Icahn organization, and Gil Brooks 3 their gaming counsel, we've spent the last 4 several months negotiating a very difficult and 5 complex asset purchase agreement. And the end 6 product of that effort is the agreement that we 7 seek the Commission's approval of today. 8 I want to express my appreciation for 9 the superb work of my counsel, Sean Mack at 10 Pashman Stein, Michael Blair and Kyle Pasewark 11 at Debevoise, Michael Sirota and Ilana Volkov 12 of Cole Schotz. And I want to express my 13 gratitude to the members of this Commission and 14 to the Division of Gaming Enforcement for your 15 patience, your hard work, and your support 16 during what I believe is an extraordinary 17 complex regulatory process. 18 I want to especially thank Mark 19 Giannantonio, the management and the employees 20 of the Tropicana for their incredible 21 dedication, loyalty, and resilience during the 22 last 16 months. In the worst economic period 23 the casino industry has ever experienced, the 24 Tropicana has performed as well or better than 25 its competitors while management was engaged in 71 ITEM NO. 14 1 the very difficult task of not only running the 2 casino but at the same time supporting two 3 extended efforts to sell its assets. 4 Finally, I want to emphasize for the 5 benefit of our customers, our suppliers, our 6 employees that although, like the entire 7 industry, our revenues and profits have been 8 affected by this difficult economy, our 9 financial position is solid. And the only 10 reason we're filing a bankruptcy petition today 11 is to be able to sell the casino's assets free 12 and clear of all liens, a benefit that's 13 afforded to us by the Federal Bankruptcy Act. 14 Over the next few months, while we 15 complete the auction sale in the bankruptcy 16 court, they'll be no change whatsoever in the 17 casino's normal business operations. And we're 18 hopeful that the summer of 2009 will signal a 19 strong rebound for the Tropicana as well as for 20 New Jersey's other casinos. 21 I'll be happy to answer any questions 22 from the Commission. 23 CHAIR KASSEKERT: Thank you. And thank 24 you for your comments, Justice. 25 Let me just add to your list, and I know 72 ITEM NO. 14 1 you did not neglect them, Dianna Fauntleroy, 2 our General Counsel, Len DiGiacomo, Tracy 3 Richardson, and Noreen Iannuzzi, who, with me, 4 have spent probably every Thursday with you on 5 a conference call, and the Division of Gaming 6 Enforcement, and have really met the measure of 7 being truly dedicated public servants 8 throughout this long process, and it has been a 9 long process. 10 Let me ask if -- 11 JUSTICE STEIN: Madame Chair, I asked 12 Len DiGiacomo if we could continue the 13 conference calls because they're -- 14 (Laughter.) 15 JUSTICE STEIN: They've been such a nice 16 interlude in our week. But I echo what you 17 say. Your staff has been wonderful. They 18 really have. And this has not been easy. 19 And when the legislature designed the 20 Casino Control Act and put in the 21 conservatorship provisions, I dare say nobody, 22 nobody could have anticipated what a complex 23 proceeding has evolved as a result of this. 24 And I really think your staff and your 25 Commission have been wonderful, and I 73 ITEM NO. 14 1 appreciate all of your -- all of your support. 2 CHAIR KASSEKERT: Thank you. 3 And let me not fail to mention both Jack 4 and, especially, Mary Jo and Bob Latimore who 5 also along with Josh Lichtblau participated in 6 those conference calls. 7 Let me ask if the Commissioners have any 8 questions? 9 COMMISSIONER SOMMELING: No questions, 10 Madame Chair. 11 CHAIR KASSEKERT: Okay. Commissioner 12 Fedorko? You have a question? 13 Okay. Very good. All right. 14 Thank you very much, again, Justice. 15 This has been a long process but a process that 16 I hope will bring us to a fruitful end with the 17 Tropicana here in Atlantic City being put into 18 the hands of, as you mentioned, people with the 19 highest integrity to run it as a property and a 20 wonderful property that it is here in Atlantic 21 City. So thank you. 22 Let me move now to closing statements? 23 I think -- Jack? 24 MR. ADAMS: Yes. Thank you, Chair. 25 My first observation really relates to 74 ITEM NO. 14 1 what Justice Stein just said and that is that 2 this truly was the perfect storm of economic 3 difficulties and other conditions that bring us 4 to where we're at today. And we are here 5 basically considering something -- a first 6 impression that this Commission has to grapple 7 with and that we have been grappling with. 8 Having said that, our report is in as an 9 exhibit. We, of course, continue to insist 10 that any approval today would be subject to the 11 conditions that have been following this 12 procedure all along, that with respect to any 13 time line you discern to be applicable, the 14 parties have indicated December 31 as an 15 outside date. We, of course, leave that to 16 your discretion. 17 We'd comment that based on everything 18 that's been represented here today and in the 19 entire proceedings that that's a realistic time 20 frame. I don't know whether specifically it's 21 set forth in the resolution, but the cash 22 collateral order we have -- we have reviewed 23 that, and we don't have any objection to that. 24 And with respect to the draft resolution as a 25 whole, I've had an opportunity to review it, 75 ITEM NO. 14 1 and we don't have any objection with respect to 2 the draft resolution. So with that, I leave it 3 to your ultimate determination with respect to 4 the approval of the agreement. 5 CHAIR KASSEKERT: Thank you. 6 Any other closing statements? 7 MR. BROOKS: Madame Chair, if I could be 8 heard in connection with just a couple of 9 items. 10 CHAIR KASSEKERT: Sure. 11 MR. BROOKS: We had made an application 12 on behalf of Credit Suisse for a qualification 13 waiver in connection with Section 82. I did 14 note that the draft resolution does provide for 15 that qualification waiver, but we made a 16 submission in that regard. And if there's any 17 questions with respect to our request, I'm 18 available to answer those questions. 19 CHAIR KASSEKERT: Any questions? 20 COMMISSIONER SOMMELING: No questions, 21 Madame Chair. 22 CHAIR KASSEKERT: Pretty laid out in the 23 resolution. 24 MR. BROOKS: And we also made an 25 application with respect to an issue in the 76 ITEM NO. 14 1 agreement, it's actually Section 7.1c(2). I 2 understand that's going to be tabled to be 3 resolved at another date, and I -- we're 4 continuing to evolve in terms of that argument, 5 and we're fine with that. And I'll continue to 6 work with Mr. DiGiacomo in that regard. 7 CHAIR KASSEKERT: I appreciate that. 8 MR. BROOKS: And I just have one last 9 thing, Madame Chair. 10 In connection with the draft resolution, 11 it is acceptable to us, except there is one 12 thing with Condition 9 I wanted to address, and 13 I didn't have a chance to address it with 14 counsel, but just for the purpose of the 15 record. Condition 9 indicates that a 16 designation of the buyer pursuant to Section 17 6.19 of the asset purchase agreement will occur 18 within five days of the end of the auction 19 period. For us, as a practical matter, we 20 would need a ruling from the Commission on the 21 issue of whether or not the buyer could be -- 22 either a subsidiary of Tropicana Entertainment, 23 Inc., which would be the entity that emerges 24 from the current Tropicana Entertainment, LLC, 25 bankruptcy or a stand-alone entity that would 77 ITEM NO. 14 1 be created for purposes of this acquisition. 2 Much of those two structures -- or those two 3 structures are addressed by -- or JP-3, which 4 we've submitted into evidence, the letter from 5 Mr. Broude. 6 CHAIR KASSEKERT: Uh-hum. 7 MR. BROOKS: And either one of those 8 sections or one of those ownership structures 9 would be fine for us, but we would need to have 10 that resolved beforehand. So if it's 11 acceptable, we would request that Condition 9 12 read that "The designation of buyer pursuant to 13 Section 6.19 of the asset purchase agreement 14 shall occur within five business days of the 15 end of the latter of the Commission's decision 16 with respect to the entity the Commission 17 approves for the acquisition of the Tropicana 18 Atlantic City," which will be consistent with 19 Paragraph 5 of the resolution "or the auction 20 period." So that way we would have some 21 guidance from the Commission as to what -- what 22 ownership structure you would approve to be the 23 buyer, and then the time frame works for us. 24 CHAIR KASSEKERT: Let me ask Mr. 25 DiGiacomo? 78 ITEM NO. 14 1 MR. DiGIACOMO: I think that sounds 2 acceptable subject to comments from other 3 counsel. 4 CHAIR KASSEKERT: Okay. Mr. Adams? 5 MR. ADAMS: Yeah. I just want to try to 6 get a clarification on that. So what you're 7 basically saying is, you're looking for an 8 alternative date or dates, meaning a resolution 9 by the Commission on the one instance or the 10 auction, whichever comes first? 11 MR. BROOKS: Well, we need to be -- in 12 terms of the -- exercising the Section 6.19 of 13 the asset purchase agreement -- 14 MR. ADAMS: Right. 15 MR. BROOKS: -- and designated buyer. 16 It just can't be after the auction sale because 17 if the Commission hasn't resolved who the buyer 18 can be, then we have two potential buyers. So 19 what we're saying is that we want to -- and by 20 the way, Paragraph 5 of the resolution 21 envisions that that issue will be resolved 22 before the Tropicana Entertainment bankruptcy 23 is resolved. So what we would -- if that's 24 going to hasten that issue to come before the 25 Commission, which is great, but we would need 79 ITEM NO. 14 1 that issue to be resolved as well. So we're 2 looking for the latter of those two events. 3 MR. ADAMS: Okay. Just wanted to be 4 clear on that. He's talking about the latter 5 of those two events. 6 CHAIR KASSEKERT: Events. Okay. 7 MR. BROOKS: And that would -- 8 CHAIR KASSEKERT: Let me just give Mr. 9 Mack a second to -- 10 MR. MACK: Just trying to get to make 11 this change consistent with the provisions of 12 the -- consistent with the provisions in the 13 purchase agreement which currently provides 14 under 6.19 that buyer will be designated as 15 soon as practicable, which I don't think is a 16 problem. 17 MR. BROOKS: And then dovetails into the 18 21-day provision in 6.5. But, actually, this 19 will happen much sooner than the 21-day 20 provision. This issue -- the way Paragraph 5 21 of the draft resolution is set up, we're going 22 to resolve this issue much more quickly. 23 CHAIR KASSEKERT: Mr. Brooks, could you 24 just -- so the Commission's hear it again, just 25 reread that language again one more time? 80 ITEM NO. 14 1 MR. BROOKS: Certainly, Madame Chair. 2 What we would suggest and with respect 3 to condition 9 in the draft resolution would be 4 language that reads as follows: The 5 designation of buyer pursuant to Section 6.19 6 of the asset purchase agreement shall occur 7 within five business days of the end of -- 8 CHAIR KASSEKERT: Slow down. 9 VICE CHAIR EPPS: Go slower. That's 10 where you need to go slow, Gil. 11 MR. BROOKS: Okay. 12 CHAIR KASSEKERT: We got five business 13 days. 14 MR. BROOKS: Of the end of -- 15 CHAIR KASSEKERT: Uh-hum. 16 MR. BROOKS: -- the latter of the 17 Commission decision with respect to the entity 18 the Commission approves for the acquisition of 19 Tropicana Atlantic City or the -- and then the 20 balance would stay same, the auction period. 21 CHAIR KASSEKERT: Okay. Okay? Good. 22 MR. BROOKS: That would give us an 23 opportunity to resolve that issue. And, 24 actually, it would be sooner than Section 6.5 25 of the asset purchase agreement. The Section 81 ITEM NO. 14 1 6.5 of the asset purchase agreement envisioned 2 that that decision would be made within a 3 21-day time period -- or application of that 4 decision would be made 21 days after the sale 5 orders. But what we're talking about is moving 6 that decision up, which is -- makes a lot of 7 sense, frankly. 8 CHAIR KASSEKERT: Okay. Let me just -- 9 (Conferring.) 10 MR. MACK: We're okay with the change, 11 Madame Chair. 12 CHAIR KASSEKERT: Okay. I think we may 13 want to just take a brief recess so everybody 14 feels comfortable. 15 VICE CHAIR EPPS: Except that gives them 16 more -- 17 CHAIR KASSEKERT: Let me ask -- 18 VICE CHAIR EPPS: -- time to talk, cause 19 more problems. 20 CHAIR KASSEKERT: Problems. You're 21 right. 22 (Laughter.) 23 CHAIR KASSEKERT: Mr. O'Gara, do you 24 wish to make a closing statement? 25 MR. O'GARA: No. Only -- we're prepared 82 ITEM NO. 14 1 to actually execute the agreement. 2 CHAIR KASSEKERT: Okay. 3 MR. O'GARA: I have the signatures pages 4 right now, so we support it. 5 CHAIR KASSEKERT: Okay. All right. 6 Let's -- we have heard closing arguments. 7 Mr. Adams, is there anything you want to 8 add? 9 MR. ADAMS: No. I don't think so, 10 Chair. 11 CHAIR KASSEKERT: Why don't we just take 12 a brief break so -- since we're getting 13 language on the floor here, Mr. Brooks. But as 14 Commissioner Epps noted, we don't want you guys 15 talking among yourselves. 16 (Laughter.) 17 CHAIR KASSEKERT: And coming back with 18 any additional changes so -- let's just take a 19 quick recess then. 20 MR. BROOKS: Thank you, Madame Chair. 21 CHAIR KASSEKERT: Thank you. 22 (A recess was taken from 12:03 to 12:24 23 p.m.) 24 CHAIR KASSEKERT: Thank you. We'll go 25 back on the record. 83 ITEM NO. 14 1 Let me ask at this point if there are 2 any procedural matters that need to be brought 3 to our attention, 4 MR. MACK: Madame Chair, I neglected to 5 mention earlier when we were talking about the 6 documents, throughout this process as we've 7 been filing the petitions and copies of these 8 agreements with Commission, I've been serving 9 them on all counsel to this, including Nancy 10 Peterman of the Greenberg Trauig law firm who I 11 understand represents the Tropicana Casinos and 12 Resorts, Inc., and Bill Yung. I just wanted to 13 make that clear, that they've received copies 14 of that as well. 15 CHAIR KASSEKERT: Thank you. I 16 appreciate that. 17 Any other procedural matters? 18 MR. BROOKS: No, Madame Chair. 19 MR. ADAMS: No. 20 CHAIR KASSEKERT: Thank you. 21 Well, unlike some of the previous 22 extension requests, we now have a fairly 23 specific and somewhat aggressive timetable to 24 complete this process, which will include 25 bidding and auction procedures in bankruptcy as 84 ITEM NO. 14 1 well as rulings by us on the organizational 2 structure of the potential buyer, for instance. 3 The time line also factors in the application 4 process for a casino license and the statutory 5 delay which may be shortened of a maximum 120 6 days to afford the Division an opportunity to 7 conduct a preliminary investigation and the 8 Commission to rule on interim casino 9 authorization. If all of the milestones are 10 met, a sale might occur by year's end. 11 In any event, given the voluminous 12 materials that have been submitted and the 13 thorough examination of them that have ensued, 14 no reasonable purpose would be served by a 15 line-by-line review of the contract here. 16 However, the Commission must be satisfied that 17 the agreement is consistent with the public 18 interest and the policies and purposes of the 19 Act, particularly Section 104b, is served. 20 Thus, there are provisions that warrant some 21 comment now. 22 For instance, if the buyer under the APA 23 successfully navigates the bid process, it will 24 seek rulings on its qualification and the 25 continuation of the conservatorship. Since 85 ITEM NO. 14 1 those rulings are not before us today, any 2 approval of the APA that the Commission might 3 issue necessarily would not include a ruling on 4 those underlying matters. 5 The Joint Petitioners have recently 6 submitted a brief and a separate supplemental 7 letter in support of their request that the 8 Commission permit a momentary lapse in the 9 conservatorship so that the title might revert 10 to Adamar which would then have both record and 11 legal title to transfer to the new buyer. 12 Although the Commission appreciates that that 13 goal is being sought, that issue is being 14 deferred. 15 With that, I do not sense that the 16 parties wish to force from us a decision that 17 is premature. Thus, I trust that they will 18 appreciate that, although I believe the 19 Commission may approve the APA with the 20 language they have chosen, in doing so, I would 21 nevertheless recommend that the Commission 22 reserve as part of any such approval the right 23 to address the issue nearer in time to when a 24 definitive response will truly be required. 25 Assuming the matter proceeds on that 86 ITEM NO. 14 1 basis, this chapter appears hopefully to be 2 drawing to a close, but certainly more of the 3 saga remains to be written, especially in that 4 there's an active auction process. Thus, I'm 5 prepared to allow the APA, allow Justice Stein 6 to take Adamar into bankruptcy for the purposes 7 of a 363 sale, and grant a further extension of 8 the sale period through the end of this year. 9 There's a draft resolution setting forth 10 such approvals as well as others of a more 11 technical nature that I move to adopt and, so 12 grant the relief requested specified therein 13 consistent with my earlier remarks and subject 14 to the various conditions, including the 15 Division's call for and continuation of the $19 16 million cash balance requirement, and I so 17 move. 18 Is there a second? 19 COMMISSIONER SOMMELING: Second. 20 VICE CHAIR EPPS: Second. 21 CHAIR KASSEKERT: Motion has been made 22 and seconded. This is a roll call vote. 23 MR. NANCE: Commissioner Fedorko? 24 COMMISSIONER FEDORKO: Yes. 25 MR. NANCE: Commissioner Sommeling? 87 ITEM NO. 14 1 COMMISSIONER SOMMELING: Yes. 2 MR. NANCE: Vice Chair Epps? 3 VICE CHAIR EPPS: Yes. 4 MR. NANCE: Chair Kassekert? 5 CHAIR KASSEKERT: Yes. 6 MR. NANCE: The record will reflect that 7 the motion is unanimous. 8 MR. MACK: Thank you. 9 MR. ADAMS: Thank you. 10 MR. O'GARA: Thank you. 11 MR. BROOKS: Thank you. 12 CHAIR KASSEKERT: Thank you. 13 MR. NANCE: In accordance with 14 Resolution No. 08-12-10-22, the next closed 15 session of the Commission shall be held on 16 Wednesday, May 20th, 2009, at 9:15 a.m. in the 17 Commission offices. 18 It is now time for the public 19 participation portion of the meeting. 20 CHAIR KASSEKERT: Is there anyone from 21 the public who wishes to be heard? 22 MS. GORDON: I would. I would like to 23 be heard. 24 CHAIR KASSEKERT: Sure, Alice. Come 25 forward. Would you please state your name for 88 PUBLIC PARTICIPATION 1 the record and -- 2 MS. GORDON: My name is Alice Gordon, 3 and I'm a resident here. 4 My family have been in the automobile 5 business since the turn of the century when 6 carriaging went out of existence and automobile 7 came. My family started an automobile 8 business, although they were residents of New 9 Jersey, Edgewood Avenue and Broad. I am quite 10 concerned about this situation because the head 11 of Columbia Sussex is no longer associated with 12 a company -- that he is no longer the 13 president. He is no longer associated. 14 I think the manner in which this was 15 handled was very unsatisfactory, and I think he 16 did not have enough good legal background, and 17 he -- he -- he and his group do have hotels all 18 over. Sheraton and everything else. 19 I have been a member of -- my relatives 20 own casinos in Vegas. My family pulled me away 21 because the Catholic priests were knocking on 22 our doors in Ventnor, and they were 23 embarrassed, and they put me in oblivion. I've 24 visited Vegas a great many times before we had 25 casino gambling here. 89 PUBLIC PARTICIPATION 1 Also, since my family are in the 2 automobile business, they had very bad crises. 3 During World War II, they couldn't sell any 4 cars. There was no tires. There was no gas. 5 And right now I am not involved with the 6 automobile business. My family are in the 7 city. So I come from a very reputable family 8 and, unfortunately, some of you sitting there 9 are not business people, especially Mr. Epps. 10 I think that you have to realize that business 11 people have ups and downs. But when you take 12 this and bring the casino down and don't -- and 13 leave the Atlantic City Press write all kinds 14 of things to demoralize a casino, this 15 shouldn't be. 16 I think that we should not consider 17 people as buyers who are takeover kings. When 18 I was -- I worked my way through college, 19 although my family wanted to put me through. 20 And I worked in a company that began the first 21 takeovers. I know exactly how they do it. And 22 I could do it myself and become a millionaire 23 on my own, but I don't think it's sensible. 24 Carl Icahn is a takeover king. He -- he is 25 now -- he has already taken MGM, their loaning 90 PUBLIC PARTICIPATION 1 companies, and has an interest there. He has 2 interests in all loan companies now. Before it 3 was different. Before, when they took 4 takeovers -- I don't want to go into that. 5 That's a long situation to explain to you. But 6 I think that although Carl Icahn had a casino, 7 the Sands here, and he has a big name, I think 8 that in this auction, it was voted on, you 9 should have extreme careful background checks. 10 And I also think that all of us have 11 lost money in the stocks. I have, too. Not 12 that drastically, but I have. Because I have a 13 lot of government bonds. But I think that you 14 should have a background check and leave the -- 15 the stockholders who own Columbia Sussex also 16 be involved in this auction. You have brought 17 down the casino down to 200 million, which was 18 worth two billion. I think the stockholders 19 should have another chance in this bid. I 20 think they need another chance. 21 That's all I want to say. Thank you 22 very much for the opportunity of -- Chairman, 23 letting me speak. 24 CHAIR KASSEKERT: Thank you for your 25 comments. 91 1 Anyone else from the public who wishes 2 to be heard? 3 (No response.) 4 CHAIR KASSEKERT: Seeing no one, I'll 5 declare this portion of the meeting closed and 6 entertain a motion to adjourn. 7 COMMISSIONER SOMMELING: Motion to 8 adjourn. 9 VICE CHAIR EPPS: 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 Thank you. 17 (Public Meeting 09-04-29 was adjourned 18 at 12:36 p.m.) 19 20 21 22 23 24 25 92 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: May 3, 2009 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25