1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 PUBLIC MEETING NO. 10-07-14 6 7 - - - - - - - - - - - - - - - - - - - 8 9 Wednesday, July 14, 2010 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 10:39 a.m. to 3:21 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 700 23 ATLANTIC CITY, NEW JERSEY 08401 24 (609) 345-8448 www.accourtreporting.com 25 2 1 B E F O R E : 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 SHARON ANNE HARRINGTON, VICE CHAIR MICHAEL C. EPPS, COMMISSIONER 4 WILLIAM T. SOMMELING, COMMISSIONER EDWARD J. FANELLE, COMMISSIONER 5 6 PRESENT FOR THE CASINO CONTROL COMMISSION: DARYL W. NANCE, ADMINISTRATIVE ANALYST 7 DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER LISA SPANGLER, PUBLICATIONS COORDINATOR 8 OFFICE OF THE GENERAL COUNSEL: 9 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 10 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL SETH H. BRILLIANT, SENIOR COUNSEL 11 ROBERT A. MONCRIEF, JR., COUNSEL TRACY E. RICHARDSON, COUNSEL 12 CLAIRE FRANK, PROGRAM MANAGER BERNADETTE T. FRIGEN, PROGRAM SUPERVISOR 13 SANDRA DeLIA, LEGAL SUPPORT SPECIALIST 14 DIVISION OF GAMING ENFORCEMENT: DEPUTY ATTORNEYS GENERAL 15 BRIAN C. BISCIEGLIA, DEPUTY ATTORNEY GENERAL TIMOTHY C. FICCHI, DEPUTY ATTORNEY GENERAL 16 JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 17 CHARLES F. KIMMEL, DEPUTY ATTORNEY GENERAL R. LANE STEBBINS, DEPUTY ATTORNEY GENERAL 18 19 20 21 22 23 24 25 3 1 A P P E A R A N C E S : 2 ITEM NO. 9 ROBERT A. MONCRIEF, JR., COUNSEL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 3 STERNS & WEINROTH, PC DENNIS DALY, ESQ. 4 FOR: TROPICANA ENTERTAINMENT, INC. 5 ITEM NO. 10 TRACY E. RICHARDSON, COUNSEL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 6 STERNS & WEINROTH, PC DENNIS DALY, ESQ. 7 FOR: TROPICANA ATLANTIC CITY CORP., AND TROPICANA ENTERTAINMENT, INC. 8 ITEM NO. 11 CLAIRE FRANK, PROGRAM SUPERVISOR 9 MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL N. LYNNE HUGHES, ESQ. 10 FOR: HARRAH'S ENTERTAINMENT 11 ITEM NO. 12 CLAIRE FRANK, PROGRAM SUPERVISOR MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 12 N. LYNNE HUGHES, ESQ. FOR: HARRAH'S ENTERTAINMENT 13 ITEM NO. 13 ROBERT A. MONCRIEF, JR., COUNSEL 14 TIMOTHY FICCHI, DEPUTY ATTORNEY GENERAL STERNS & WEINROTH, PC 15 DENNIS DALY, ESQ. TAMA B. HUGHES, ESQ. 16 FOR: TROPICANA ATLANTIC CITY CORP. 17 ITEM NO. 14 SETH H. BRILIANT, SENIOR COUNSEL CHARLES F. KIMMEL, DEPUTY ATTORNEY GENERAL 18 LEO PREVITI, ESQ. FOR: IGT 19 ITEM NO. 15 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 20 MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL LEO PREVITI, ESQ. 21 FOR: IGT 22 ITEM NO. 18 SETH H. BRILIANT, SENIOR COUNSEL CHARLES F. KIMMEL, DEPUTY ATTORNEY GENERAL 23 FOX ROTHSCHILD MARIE JONES, ESQ. 24 FOR: ARISTOCRAT 25 4 1 A P P E A R A N C E S continued: 2 ITEM NO. 19 MARY WOZNIAK, ASSISTANT COUNSEL MARY JO FLAHERTY, DEPUTY ATTORNEY GENERAL 3 STERNS & WEINROTH PAUL M. O'GARA, ESQ. 4 FOR: TPG GENPAR V, LP, AND TGP ADVISORS V, INC. 5 ITEM NO 20 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 6 JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 7 NICHOLAS CASIELLO, ESQ. PATRICK MADAMBA, ESQ. 8 FOR: AVENUE NJ ENTERTAINMENT, LLC AND AVENUE CAPITAL MANAGEMENT II, LP 9 ITEM NO. 21 MARY WOZNIAK, ASSISTANT GENERAL COUNSEL 10 JAMES C. FOGARTY, DEPUTY ATTORNEY GENERAL FOX ROTHSCHILD, LLP 11 NICHOLAS CASIELLO, ESQ. PATRICK MADAMBA, ESQ. 12 FOR: TRUMP ENTERTAINMENT RESORTS, INC. 13 14 15 16 17 18 19 20 21 22 23 24 25 5 1 AGENDA PUBLIC MEETING NO. 10-07-14 2 JULY 14, 2010, 10:39 a.m. ITEM PAGE VOTE 3 1 Ratification of the minutes of the 11 11 June 24, 2010, public meeting 4 Ratification of the minutes of the 11 12 June 24, 2010, special public meeting 5 Value Award presentation 12 2 Applications for employee and casino 6 service industry licenses 8 initial and/or renewal of casino key 14 14 7 and casino employee licenses Renewal application of Marietheia Bryant 14 15 8 for a casion employee license 9 initial and/or renewal of casino key 15 16 9 and casino employee licenses 3 Stipulations of settlement and consent agreements: 10 a) Shah Mohammed Rasifzaman (09-0714-ER) 16 18 b) Arthur F. Bradley (10-0071-RC) 16 18 11 c) Loammi B. Melo (09-0607-RC) 16 18 d) Ernest O. Ruffin, Jr. (09-0303-RC) 16 18 12 e) Edwin O. Trujillo-Alfaro (09-0336-RC) 16 18 f) Andre J. Brown (09-0628-EA) 16 18 13 g) Gregory P. Scalia (10-0140-EA) 16 18 h) Warren A. White (10-0009-ER) 16 18 14 i) Guo Y. Chen (08-0566-RC) 16 18 j) Keith D. Russell (09-0587-ER) 16 18 15 k) Theresa M. Flora (10-0054-EA) 16 18 l) Tina M. Doughty (a/k/a Tina Hickey 16 18 16 (09-0310-RC) m) Joseph J. Orlano (09-0686-EA) 16 18 17 n) Jessier Soriano (10-0152-EA) 16 18 o) Joseph A. Wydra (08-0915-ER) 16 18 18 4 Initial Decision in State v. Mildred R. 18 20 Dennis (09-0703-RC) 19 5 Petition of Shyquon D. Rayford for 20 21 early reapplication (10-0167-RA) 20 6 Final exclusion of Frank T. Baldino 22 23 (09-0296-EL) 21 7 Applications for suspension: a) Liqiang Chen (10-0201-RC) 23 25 22 b) Jheri Ramos (10-0200-RC) 23 25 c) Jorge Ramos (10-0199-RC) 23 25 23 8 Consideration of forfeiture orders in: a) Marina District Development Company 25 28 24 LLC, et al. (10-0023-VC) b) Trump Plaza Associates, et al 25 28 25 (10-0061-VC) 6 1 CONTINUED AGENDA PUBLIC MEETING NO. 10-07-14 2 JULY 14, 2010, 10:39 a.m. ITEM PAGE VOTE 3 8 c) Marina District Development Company, 25 28 LLC, et al (10-0112-VC) 4 d) Trump Taj Mahal Associates, et al. 25 28 (10-0113-VC) 5 9 Petition of Tropicana Entertainment, Inc. 28 31 Requesting permission for Daniel A. 6 Cassella to assume the duties and exercise the powers of a member of the Board of 7 Directors and of the Audit Committee of the Board of Directors for Tropicana Entertainment, 8 Inc., pursuant to NJAC 19:43-2.7(c) (PRN 1451001) 10 Petition of Tropicana Atlantic City Corp. 31 33 9 and Tropicana Entertainment, Inc., for a waiver of the qualification requirement for 10 Chris Benak, Vice President, Accounting for Tropicana Entertainment, inc. (PRN 1611001) 11 11 Plenary qualification of Peter Murphy as 34 35 President, Strategy & Development for 12 Harrah's Entertainment, Inc. 12 Plenary qualification of Duane Holloway as 36 37 13 Vice President, Litigation and Labor and Employment for Harrah's Entertainment, Inc. 14 And Harrah's Operating Company, Inc. 13 Petition of Atlantic City Corp. (d/b/a 38 53 15 Tropicana Casino and Resort) requesting amendment to its operations certificate 16 pursuant to NJSA 5:12-96c and casino license pursuant to NJSA 5:12-80 et seq. (PRN 1651001) 17 14 Petition of IGT for permission to transfer 53 55 a progressive annuity slot jackpot pursuant 18 to NJAC 19:45-1.39(n) (PRN 1621001) 15 Petition of IGT for permission to transfer 55 56 19 a progressive instant-pay slot jackpot pursuant to NJAC 19:45-1.3(n) (PRN 1621002) 20 16 Petition of Shuffle Master, Inc., Customized adj. Casino Games, Ltd., and Bally's Park Place, 21 Inc., (d/b/a Bally's Atlantic City) for approval of "Blackjack Switch" as an authorized game 22 pursuant to NJSA 5:12-5 and NJSA 5:12-69(e) (PRN 0501006); and 23 Proposed temporary adoption of amendements to NJAC 19:45-1.12; 19:46-1.17 through 1.19 and new 24 rules NJAC 19:46-1.10C, 19:47-2A.1 through 2A.14 et seq. pursuant to NJSA 5:12-69(e) (Blackjack 25 Switch) 7 1 PUBLIC MEETING NO. 10-07-14 2 JULY 14, 2010, 10:39 a.m. ITEM PAGE VOTE 3 17 Proposed temporary adoption of NJAC 57 58 19:45-1.8 and 1.10; NJAC 19:47-14.19; and 4 new rule NJAC 19:45-1.39(d) (Multi-Casino Bad Beat Payout System) 5 18 Petition of Aristocrat to possess and 58 59 display slot machines pursuant to NJAC 6 19:46-1.22(b) (PRN 1871002) 19 Petition of TPG Genpar V, LP, and TPG 60 62 7 Advisors V, Inc., for approval of a restructuring agreement and other relief 8 (PRN 1601001) 20 Petition of Avenue NJ Entertainment, LLC, 63 94 9 for interim casino authorization pursuant to NJSA 5:12-95.13 (PRN 0531002); 10 Amended petition of Avenue NJ Entertainment, LLC, for approval of a trust agreement 11 (PRN 0471004); and Amended petition of Avenue Capital Management 12 II, LP, for declaratory rulings as to the completeness of an application to be found 13 qualified (PRN 2680906) Marc Lasry, sworn 68 14 21 Amended petition of Trump Entertainment 95 157 Resorts, Inc., for approvals necessary under 15 the Casino Control Act, NJSA 5:12-1 et seq. to consummate a plan of reorganization 16 (PRN 1341004) John P. Burke, sworn 103 17 Mark Juliano, sworn 124 22 Motion of Icahn Partners, LP, Icahn 18 Partners Master Fund, LP, Icahn Partners withdrawn Master Fund II, LP, and Icahn Partners 19 Master Fund III, LP, to participate in PRN 1341004 pursuant to NJAC 1:1-16.6 (PRN 1941007) 20 21 22 23 24 25 8 1 E X H I B I T S : 2 NO. DESCRIPTION ID EVD 3 P-1 Remand for hearings 8 license X 4 P-2 Grant 9 licenses X 5 6 ITEM NO. 20 7 C-1 Draft Resolution X 8 D-1 DGE Report, 6-29-10 regarding Petition X No. 0531002, 2680906, 0471004 9 A-1 Chart depicting Avenue Capital Group's X 10 organizational structure for holding its interest in reorganized Trump Entertainment 11 Resorts, Inc. A-2 First Amended and Restated Trust Agreement X 12 June 16, 2010 13 ITEM NO. 21 14 C-1 Draft Resolution X 15 D-1 DGE Report, 7-1-10, James C. Fogarty, DAG X Re: PRN 1341001 16 P-1 Supplemental Modified Sixth Amended Joint X 17 Plan of Reorganization under Chapter 11 of the Bankruptcy Code proposed by the ad hoc 18 committee of holders of 8.5% senior secured notes due 2015 and the debtors 19 P-2 Findings of Fact, Conclusions of Law, and X Order Confirming Supplemental Modified Sixth 20 Amended Joint Plan of Reorganization under Chapter 11 of Bankruptcy Code proposed by 21 the ad hoc committee of holders of 8.5% senior Secured notes due 2015 and the debtors 22 (without exhibits) P-3 Charts depicting the organization structure X 23 of Trump Entertainment Resorts, Inc., and its affiliates pre- and post-restructuring 24 P-4 Amended and Restated Credit Agreement in the X form approved by the US Bankruptcy Court 5-7-10 25 9 1 CONTINUED E X H I B I T S : 2 NO. 21 DESCRIPTION ID EVD 3 P-5 Short biographies of the proposed new X Directors of Trump Entertainment Resorts, 4 Inc., (i.e. Messrs. Marc Lasry, Rob Symington, David Licht, Stephen MCall, Eugene 5 Davis and Jeffrey Gilbert) P-6 Draft of proposed Amended Certificate of X 6 Incorporation of Trump Entertainment Resorts, Inc. 7 P-7 Draft of proposed Fifth Amended and Restated X Agreement of Limited Partnership of Trump 8 Entertainment Resorts Holdings, LP P-8 Draft of Amended and Restated Services X 9 Agreement P-9 Draft of Amended and Restated Trademark X 10 License Agreement P-10 Draft of Certificate of Incorporation for X 11 TERH, LP, Inc. P-11 Institutional Investor Certification of X 12 Brigade Capital P-12 Institutional Investor Certification of X 13 Contrarian Capital Management, LLC and Supplemental Certification of Contrarian 14 Capital Management, LLC P-13 Institutional Investor Certification of X 15 Golden Tree Asset Management, LP P-14 Institutional Investor Certification of X 16 MFC Global Investment (US), LLC P-15 Institutional Investor Certification of X 17 Northeast Investors Trust P-16 Institutional Investor Certification of X 18 Oaktree Capital Management, LP P-17 Institutional Investor Certification of X 19 Polygon Investment Partners, LLP and Supplemental Certification of Polygon 20 Investment Partners, LLP P-18 Draft, First Amendment to the Limited X 21 Liability Company Agreement of Trump Plaza Associates, LLC 22 P-19 Draft, First Amendment to the Limited X Liability Company Agreement of Trump Taj 23 Mahal Associates, LLC P-20 Draft, First Amendment to the Limited X 24 Liability Company Agreement of Trump Marina Associates, LLC 25 Exhibits retained by Commission. 10 1 (Public Meeting 10-07-14 was commenced 2 at 10:39 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 Meeting Act," the New Jersey Casino Control 9 Commission on October 15, 2009, filed with the 10 Secretary of State at the State House in 11 Trenton, New Jersey, a notice of this hearing. 12 On October 16, 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 is prohibited. 20 Any member of the public who wish to 21 address the Commission will be given the 22 opportunity to do so before the Commission 23 adjourns for the day. 24 Please stand for the Pledge of 25 Allegiance. 11 ITEM NO. 1 1 (The flag salute was recited.) 2 CHAIR KASSEKERT: Good morning. 3 MR. NANCE: Good morning. 4 The matters discussed in closed session 5 were: Employee and enterprise license matters. 6 The Commission approved the June 16th, 7 2010, closed-session meeting minutes. 8 Litigation update regarding: Edwards 9 versus Adamar New Jersey, Inc., et al. 10 Item No. 1, ratification of the minutes 11 of June 16th, 2010, public meeting. 12 COMMISSIONER SOMMELING: Move to 13 approve. 14 COMMISSIONER FANELLE: 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: And ratification of the 22 special meeting minutes of June 24th, 2010. 23 COMMISSIONER SOMMELING: Move to 24 approve. 25 COMMISSIONER FANELLE: Second. 12 ITEM NO. 1 1 CHAIR KASSEKERT: Motion has been made 2 and seconded. All in favor? 3 (Ayes.) 4 CHAIR KASSEKERT: Opposed? 5 (No response.) 6 CHAIR KASSEKERT: Motion carries. 7 MR. NANCE: Miss Spangler? 8 MS. SPANGLER: Madame Chair, 9 Commissioners, good morning. 10 We are here today to present the first 11 of many monthly Value Awards. This will be for 12 the month of July. 13 I'd like to introduce Indra Quareeb from 14 the License Division. As Indra comes forward, 15 I'd like the Commissioners to come down, Madame 16 Chair, to present the certificate to Indra. 17 CHAIR KASSEKERT: Very good. 18 Congratulations. 19 MS. QUAREEB: Thank you. 20 CHAIR KASSEKERT: We're going to put you 21 right in the middle. 22 Who's going to take the picture? 23 MS. SPANGLER: I am. 24 (Laughter.) 25 CHAIR KASSEKERT: You are. Very good. 13 1 Jack-of-all-trades, Lisa. 2 You tell us where to stand. Are we 3 okay? Where's Commissioner Epps? 4 MS. SPENGLER: Perfect. 5 Very nice. Thank you. 6 (Applause.) 7 CHAIR KASSEKERT: Let me just say this 8 is the first of what Lisa said will be many 9 Value Awards. Let me thank Commissioner 10 Fanelle who brought the idea here as a way to 11 sort of recognize our outstanding employees. 12 You know, in a time when there's tight fiscal 13 constraints on all of us, we want to recognize 14 people for the good job that they've done. 15 I also want to recognize the other 16 individuals who were also nominated, and I'm 17 sure we'll be considering them in the future. 18 William Carlton from the Division the 19 Administration, Robert Hudak from Compliance, 20 Anne Hyatt from the Financial Division, and 21 Teresa Nagengast from the General Counsel's 22 Office. 23 So we're very pleased to start this off, 24 and we will be doing this once a month. 25 COMMISSIONER FANELLE: Correct. 14 ITEM NO. 2 1 CHAIR KASSEKERT: And I want to again 2 thank Commissioner Fanelle and Commissioner 3 Harrington who organized this as well as Chief 4 of Staff Scanlon. 5 Thank you. 6 (Applause.) 7 MR. NANCE: Item No. 2, application for 8 employee and casino service industry licenses. 9 This agenda item will be entered as Exhibit 10 List 1 and 2. 11 Exhibit List 1 consists of eight 12 applications for initial and/or renewal of 13 casino key and casino employee licenses. 14 The Division has objected to licensure. 15 COMMISSIONER EPPS: I move that we 16 remand these matters for hearing. 17 COMMISSIONER SOMMELING: 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 MR. NANCE: For consideration is the 25 renewal application of Maretheia Bryant for a 15 ITEM NO. 2 1 casino employee license. 2 The Division has recommended that this 3 application be granted. 4 VICE CHAIR HARRINGTON: I would move 5 that we remand this particular item to -- for a 6 hearing. 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 Motion -- 13 COMMISSIONER EPPS: Aye. Opposed. 14 CHAIR KASSEKERT: Motion passes four to 15 one. 16 MR. NANCE: Exhibit List 2 consists of 17 nine applications for initial and/or renewal of 18 casino key and/or casino employee license. 19 Staff and the Division have recommended 20 that these licenses be granted. 21 VICE CHAIR HARRINGTON: I'll move that 22 we grant these applications. 23 COMMISSIONER FANELLE: Second. 24 CHAIR KASSEKERT: The motion has been 25 made and seconded. All in favor? 16 ITEM NO. 3 1 (Ayes.) 2 CHAIR KASSEKERT: Opposed? 3 (No response.) 4 CHAIR KASSEKERT: Motion carries. 5 MR. NANCE: Item No. 3, stipulations of 6 settlement and consent agreement. When I call 7 your name, please come forward, standing behind 8 this middle table, spreading across the room so 9 that you may be seen: Shah Mohammed Rasifzamn, 10 Arthur Bradley, Loammi Melo, Ernest Ruffin, 11 Jr., Edwin Alfaro, Andre Brown, Gregory Scalia, 12 Warren White, Guo Chen, Keith Russell, Theresa 13 Flora, Tina Doughty, Joseph Orlano, Jessier 14 Soriano, and Joseph Wydra. 15 CHAIR KASSEKERT: Has everyone whose 16 name come forward -- been called come forward 17 at this point? 18 I'm going to ask that you each state 19 your name for the record, starting with you, 20 sir. 21 MR. WYDRA: Joseph Wydra. 22 CHAIR KASSEKERT: Ma'am? Your name. 23 MS. MELO: Loammi Melo. 24 MR. WHITE: Warren White. 25 MS. DOUGHTY: Tina Doughty. 17 ITEM NO. 3 1 CHAIR KASSEKERT: Okay. In a moment we 2 are going to vote on the stipulations which 3 you've agreed to with the Division of Gaming 4 Enforcement. I'm going to ask if any of you 5 wish to be heard on your matter. You don't 6 have to say anything if you don't want to. 7 Does anybody wish to be heard? 8 (No response.) 9 CHAIR KASSEKERT: I'll take that as a 10 no. 11 Mr. Biscieglia? 12 MR. BISCIEGLIA: Thank you. 13 The only thing the Division would add is 14 in regards to M. I don't know if this was 15 going to be called separately or not. But 16 Joseph Orlano, there was a question of a $408 17 debt owed to Barneby's that the Division has 18 confirmed has been satisfied. 19 Other than that, the Division has 20 nothing further and would ask that the 21 stipulations be approved. 22 CHAIR KASSEKERT: Thank you. 23 Any questions? 24 COMMISSIONER SOMMELING: Madame Chair, 25 move to approve the stipulations. 18 ITEM NO. 4 1 VICE CHAIR HARRINGTON: Second. 2 COMMISSIONER FANELLE: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 Thank you for coming. Good luck. 10 FROM THE FLOOR: Thank you. 11 FROM THE FLOOR: Thank you. 12 MR. NANCE: Item No. 4, initial decision 13 in State versus Mildred R. Dennis. 14 MR. MONCRIEF: Good morning, Madame 15 Chair, members of the Commission. 16 MR. NANCE: Mr. Moncrief? 17 MR. MONCRIEF: I'll ask if Mildred 18 Dennis or anyone representing her is here to 19 appear on her behalf? 20 (No response.) 21 MR. MONCRIEF: I see no one is here. 22 Before you is the consideration of 23 initial decision of State versus Mildred 24 Dennis. The decision was rendered by Vice 25 Chair Harrington. The Division found that Miss 19 ITEM NO. 4 1 Dennis is disqualified from having a casino 2 employee license or a casino employee -- casino 3 service employee registration; however, there 4 was good cause to find -- to allow her to have 5 non-credentialed employment. 6 I'll leave the item for you to consider. 7 CHAIR KASSEKERT: Thank you. 8 Mr. Biscieglia, anything to add? 9 MR. BISCIEGLIA: Thank you. The 10 Division did not file any exceptions to the 11 initial decision and ask the initial decision 12 be approved as written. 13 Thank you. 14 CHAIR KASSEKERT: Thank you. 15 Any questions? 16 COMMISSIONER SOMMELING: No questions, 17 Madame Chair. 18 MR. FANELLE: Madame Chair, I move that 19 we adopt the initial decision and find Mildred 20 R. Dennis disqualified from holding a casino 21 employee license and a casino industry 22 registration; however, good cause is found 23 pursuant to NJSA 5:12-106(c) to permit Miss 24 Dennis to obtain employment in a position that 25 does not require a credential. 20 ITEM NO. 5 1 CHAIR KASSEKERT: Is there a second? 2 COMMISSIONER SOMMELING: Second. 3 CHAIR KASSEKERT: The motion has been 4 made and seconded. All in favor? 5 (Ayes.) 6 CHAIR KASSEKERT: Opposed? 7 (No response.) 8 CHAIR KASSEKERT: Motion carries. 9 Thank you. 10 MR. MONCRIEF: Thank you. 11 MR. NANCE: Item No. 5, petition of 12 Shyquon D. Rayford for early reapplication. 13 Miss Frigen? 14 MS. FRIGEN: Good morning, Madame Chair, 15 Commissioners. 16 For your consideration is Mr. Rayford's 17 petition seeking permission to reapply early 18 for a license registration and non-credential 19 hotel employment. 20 The Division has interposed no objection 21 to this petition. 22 CHAIR KASSEKERT: Thank you. 23 Mr. Rayford, is there anything you want 24 to say today? 25 MR. RAYFORD: No. 21 ITEM NO. 5 1 CHAIR KASSEKERT: Okay. 2 Mr. Biscieglia? 3 MR. BISCIEGLIA: Thank you. 4 As Miss Frigen stated, the Division 5 interposed no objection in our June 14th, 2010, 6 letter. And I will answer any questions that 7 the Commissioner may have. 8 Thank you. 9 CHAIR KASSEKERT: Thank you. 10 Any questions for Mr. Biscieglia? 11 COMMISSIONER SOMMELING: Madame Chair, 12 move to grant Mr. Rayford permission to reapply 13 early for a casino employee license, a casino 14 service employee registration, and/or to or 15 obtain employment early as a non-credential 16 hotel employee. 17 COMMISSIONER 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 for coming. Good luck. 25 MR. RAYFORD: Thank you. 22 ITEM NO. 6 1 MR. NANCE: Item No. 6, final exclusion 2 of Frank T. Bartino -- baldino. Excuse me. 3 Miss DeLia? 4 MS. DeLIA: Good morning, Chair and 5 Commissioners. 6 I would like to ask if Mr. Baldino or 7 his representative is here? 8 (No response.) 9 MS. DeLIA: Okay. Apparently not. 10 The Commission has already entered a 11 preliminary exclusion order placing Mr. Baldino 12 on the exclusion list. 13 Initially, Mr. Baldino's attorney, 14 Donald F. Manno, requested a final hearing but 15 subsequently advised that his client was not 16 going to contest the final exclusion, and he 17 was waiving his right to a hearing. 18 The matter is now being presented to the 19 Commission for final action. 20 CHAIR KASSEKERT: Thank you. 21 Mr. Stebbins? 22 MR. STEBBINS: Thank you, Madame Chair, 23 members of the Commission. 24 I don't see either counsel or the 25 Respondent present. 23 ITEM NO. 7 1 We did go through some process with 2 this, and when asked to produce certain 3 documents as part of discovery, Mr. Baldino 4 decided he would walk away, which is where we 5 are today. 6 I would ask you to enter the appropriate 7 order. 8 CHAIR KASSEKERT: Thank you. 9 Any questions for Mr. Stebbins? 10 COMMISSIONER SOMMELING: I have no 11 questions Madame Chair. 12 COMMISSIONER EPPS: Chair, I move that 13 we issue a final order excluding Frank T. 14 Baldino. 15 COMMISSIONER FANELLE: 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 MR. STEBBINS: Thank you. 23 CHAIR KASSEKERT: Thank you. 24 MR. NANCE: Item No. 7, application for 25 suspension for Liqianq Chen and Jheri Ramos and 24 ITEM NO. 7 1 Jorge Ramos. 2 Miss DeLia? 3 MS. DeLIA: Are any of the respondents 4 here or represented? 5 (No response.) 6 MS. DeLIA: Okay. Mr. Biscieglia is 7 here on behalf of the Division. 8 CHAIR KASSEKERT: Mr. Biscieglia? 9 MR. BISCIEGLIA: Thank you. 10 The Division will rest on its suspension 11 applications and complaints. 12 I would like to add that in regards to 13 A, Liqianq Chen, that matter is currently 14 pending a grand jury with no date set. 15 In regards to B and C, Jheri Ramos and 16 Jorge Ramos, they've both been remanded to 17 Atlantic City Municipal Court and are scheduled 18 for trial on July 23rd, 2010. 19 CHAIR KASSEKERT: Thank you. 20 MR. BISCIEGLIA: Thank you. 21 CHAIR KASSEKERT: Any questions? 22 COMMISSIONER SOMMELING: No questions, 23 Madame Chair. 24 COMMISSIONER EPPS: Move that we grant 25 the Division's applications for suspension. 25 ITEM NO. 8 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 Thank you. 9 MR. BISCIEGLIA: Thank you. 10 MR. NANCE: Item No. 8, consideration of 11 forfeiture orders in Marina District 12 Development Company, LLC, et al., Trump Plaza 13 Associates, et al., Marina District Development 14 Company, LLC, et al., and Trump Taj Mahal 15 Associates, et al. 16 Miss DeLia? 17 MS. DeLIA: For the Commission's 18 consideration are four forfeiture orders 19 seeking money confiscated by the Borgata. The 20 Borgata has two separate forfeiture actions, 21 Trump Plaza and Trump Taj Mahal from underage 22 or self-excluded patrons to be turned over to 23 the Commission for disposition. 24 I'd like to dismiss the forfeiture 25 action with respect to several patrons based on 26 ITEM NO. 8 1 inability to effectuate proper notice and 2 adjourn one action due to lack of service. The 3 forfeiture amounts have been adjusted 4 accordingly. 5 The respective counsel for the three 6 licensees have provided letters advising that 7 they have no objection to the entry of a 8 forfeiture order. 9 Each patient -- excuse me -- patron was 10 provided with notice and the opportunity to be 11 heard. Two patrons requested conferences but 12 failed to show. The remaining patrons have 13 either not responded or stated that they were 14 not contesting the action. 15 The matter is now being presented to the 16 Commission for final action. 17 Mr. Stebbins is here on behalf of the 18 Division. 19 CHAIR KASSEKERT: Thank you. 20 Mr. Stebbins? 21 MR. STEBBINS: Thank you, Madame Chair, 22 members of the Commission. 23 Ms. DeLia and I have been in contact 24 with regards to the adjustments to the amounts 25 based upon service issues and things like that. 27 ITEM NO. 8 1 The numbers are -- that she presents to you in 2 the orders are correct. 3 I would note that this is a little over 4 $7,000 worth of forfeitures. Takes our total 5 for the year for something over $26,000, and 6 seems to be working well. 7 I'd ask you to enter the appropriate 8 orders. 9 Thank you. 10 CHAIR KASSEKERT: Thank you. 11 Any questions for Mr. Stebbins? 12 COMMISSIONER SOMMELING: No questions, 13 Madame Chair. 14 COMMISSIONER EPPS: Madame Chair, I move 15 that we dismiss without privilege the 16 forfeiture actions with respect to patrons "HK" 17 and "JG" in the Trump Taj Mahal Associates 18 complaint, Agency Docket No. 10-0113-VC, and 19 patrons "FC," "MP," "SAG," "YLN" and "MPC" in 20 the Trump Plaza Associates complaint, Agency 21 Docket No. 10-0061-VC, based upon the 22 Commission's inability to effectuate proper 23 notice as required by Section 71.3(c) of the 24 Act; and adjourn the forfeiture with respect to 25 patron "FA" in the Trump Plaza Associates 28 ITEM NO. 9 1 complaint, Agency Docket No. 10-0061-VC, due to 2 lack of service; but otherwise order that the 3 remaining money seized from the other patrons 4 in these four complaints be forfeited due to 5 their having gambled while underage or on the 6 self-exclusion list and their -- the respective 7 casinos are directed to remit the forfeited 8 funds to the Commission for appropriate 9 disposition in accordance with NJSA 10 5:12-71.3(c). 11 CHAIR KASSEKERT: Is there a second? 12 VICE CHAIR HARRINGTON: Second. 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. STEBBINS: Thank you. 21 CHAIR KASSEKERT: Thank you. 22 MR. NANCE: Item No. 9, petition of 23 Trump -- Trop -- excuse me. Petition of 24 Tropicana Entertainment, Inc., requesting 25 permission for Daniel A. Cassella to assume the 29 ITEM NO. 9 1 duties and exercise the powers of a member of 2 the Board of Directors and of the Audit 3 Committee of the Board of Directors of 4 Tropicana Entertainment, Inc., pursuant to NJAC 5 19:43-2.7(c). 6 MS. RICHARDSON: Good morning, Chair and 7 Commissioners. 8 Appearing for the Petitioner is Dennis 9 Daly and for the Division is DAG Mary Jo 10 Flaherty. 11 CHAIR KASSEKERT: Thank you. 12 Good morning, Mr. Daly. 13 MR. DALY: Good morning, Chair, 14 Commissioners. 15 We've had the opportunity to review the 16 draft resolution, and we accept the conditions 17 imposed therein, and we ask you to adopt it. 18 CHAIR KASSEKERT: Thank you. 19 Miss Flaherty? 20 MS. FLAHERTY: Yes. Good morning, Chair 21 and Commissioners. 22 The Division submitted a report dated 23 June 29 with regard to Mr. Cassella's temporary 24 qualification on the Board and on the Audit 25 Committee of Tropicana Entertainment. We have 30 ITEM NO. 9 1 no objection to his service on those -- that 2 board and committee for an interim basis. 3 I would note that we looked at the 4 independence in light of his position on the 5 Audit Committee. At this point we have no 6 objection. We'll more fully investigate that 7 during our plenary investigation. 8 And we have no issue with the draft 9 resolution. 10 CHAIR KASSEKERT: Thank you. 11 MS. FLAHERTY: Thank you. 12 CHAIR KASSEKERT: Any questions? 13 COMMISSIONER SOMMELING: No questions, 14 Madame Chair. 15 VICE CHAIR HARRINGTON: I'll move that 16 we adopt the draft resolution and authorize 17 Daniel A. Cassella on a temporary basis and 18 prior to his plenary qualification to assume 19 the duties and exercise powers of the member of 20 the Board of Directors and of the Audit 21 Committee of the Board of Directors for 22 Tropicana Entertainment, Inc., subject to the 23 conditions contained in NJAC 19:43-2.7 and in 24 the resolution. 25 COMMISSIONER SOMMELING: Second. 31 ITEM NO. 10 1 CHAIR KASSEKERT: Motion is made and 2 seconded. This is a roll call vote. 3 MR. NANCE: Commissioner Sommeling? 4 COMMISSIONER SOMMELING: Yes. 5 MR. NANCE: Commissioner Epps? 6 COMMISSIONER EPPS: Yes. 7 MR. NANCE: Commissioner Fanelle? 8 COMMISSIONER FANELLE: Yes. 9 MR. NANCE: Vice Chair Harrington? 10 VICE CHAIR HARRINGTON: Yes. 11 MR. NANCE: Chair Kassekert? 12 CHAIR KASSEKERT: Yes. 13 MR. NANCE: The record will reflect that 14 the motion is unanimous. 15 CHAIR KASSEKERT: Thank you. 16 MR. NANCE: Item No. 10, petition of 17 Tropicana Atlantic City Corp. and Tropicana 18 Entertainment, Inc, for a waiver of a 19 qualification requirement for Chris Benak, Vice 20 President, Accounting for Tropicana 21 Entertainment, Inc. 22 Miss Richardson? 23 MS. RICHARDSON: Again for the 24 Petitioners is Dennis Daly, and for the 25 Division is DAG Mary Jo Flaherty. 32 ITEM NO. 10 1 CHAIR KASSEKERT: Thank you. 2 Mr. Daly? 3 MR. DALY: And, once again, we have had 4 the opportunity to review the draft resolution. 5 We find it fully acceptable, and we'll agree to 6 abide by the conditions stated therein. I 7 encourage you to adopt it. 8 CHAIR KASSEKERT: Thank you. 9 Miss Flaherty? 10 MS. FLAHERTY: Yes, Chair and 11 Commissioners. 12 The Division submitted a response dated 13 June 29 with regard to the waiver of Mr. Benak 14 as Vice President of Accounting for Tropicana 15 Entertainment. 16 We would note that Lance Millage is a 17 Senior Vice President of Finance and Treasurer 18 of Tropicana Entertainment, and is a qualifier. 19 Based on our review, the Director would concur 20 in a waiver because Mr. Benak is not 21 significantly involved in the activities of the 22 licensee, Tropicana Atlantic City. 23 And, again, we have no issue with regard 24 to the draft resolution. 25 Thank you. 33 ITEM NO. 10 1 CHAIR KASSEKERT: Thank you. 2 Any questions? 3 COMMISSIONER SOMMELING: No questions, 4 Madame Chair. 5 VICE CHAIR HARRINGTON: I'll move that 6 we adopt the draft resolution subject to the 7 conditions in the resolution. 8 COMMISSIONER FANELLE: Second. 9 CHAIR KASSEKERT: Motion is made and 10 seconded. This is a roll call vote. 11 MR. NANCE: Commissioner Sommeling? 12 COMMISSIONER SOMMELING: Yes. 13 MR. NANCE: Commissioner Epps? 14 COMMISSIONER EPPS: Yes. 15 MR. NANCE: Commissioner Fanelle? 16 COMMISSIONER FANELLE: Yes. 17 MR. NANCE: Vice Chair Harrington? 18 VICE CHAIR HARRINGTON: Yes. 19 MR. NANCE: Chair Kassekert? 20 CHAIR KASSEKERT: Yes. 21 MR. NANCE: The record will reflect that 22 the motion is unanimous. 23 CHAIR KASSEKERT: Thank you. 24 MR. DALY: Thank you, Chair. 25 MS. RICHARDSON: Thank you. 34 ITEM NO. 11 1 MR. NANCE: Item No. 11, plenary 2 qualification of Peter Murphy as President, 3 Strategy and Development for Harrah's 4 Entertainment, Inc. 5 Miss Frank? 6 MS. FRANK: Good morning, Chair and 7 Commission. 8 Mr. Murphy received temporary 9 qualification from this Commission on October 10 14th, 2009. A draft resolution on his plenary 11 qualification has been circulated to the 12 parties. 13 And we have Miss Hughes here for 14 Harrah's and Miss Flaherty for the Division. 15 CHAIR KASSEKERT: Good morning, Miss 16 Hughes. 17 MS. HUGHES: Good morning, Chair, 18 Commissioners. 19 I have had an opportunity to review the 20 resolution and ask that you adopt it. 21 Thank you. 22 CHAIR KASSEKERT: Thank you. 23 Miss Flaherty, again? 24 MS. FLAHERTY: Chair, Commissioners, the 25 Division submitted its reported dated July 7th 35 ITEM NO. 11 1 reporting the results of its plenary 2 investigation. We have no objection to his 3 qualification and no objections with regard to 4 draft resolution. 5 Thank you. 6 CHAIR KASSEKERT: Thank you. 7 Any questions? 8 COMMISSIONER SOMMELING: No questions, 9 Madame Chair. 10 Move to adopt the draft resolution, and 11 find Peter Murphy qualified to serve as 12 President of Strategy and Development or 13 Harrah's Entertainment, Inc., and Harrah's 14 Operating Company. 15 COMMISSIONER EPPS: Second. 16 CHAIR KASSEKERT: Motion is made and 17 seconded. This is a roll call vote. 18 MR. NANCE: Commissioner Sommeling? 19 COMMISSIONER SOMMELING: Yes. 20 MR. NANCE: Commissioner Epps? 21 COMMISSIONER EPPS: Yes. 22 MR. NANCE: Commissioner Fanelle? 23 COMMISSIONER FANELLE: Yes. 24 MR. NANCE: Vice Chair Harrington? 25 VICE CHAIR HARRINGTON: Yes. 36 ITEM NO. 12 1 MR. NANCE: Chair Kassekert? 2 CHAIR KASSEKERT: Yes. 3 MR. NANCE: The record will reflect that 4 the motion is unanimous. 5 Item No. 12, plenary qualification of 6 Duane Holloway as Vice President, Litigation 7 and Labor and Employment for Harrah's 8 Entertainment, Inc., and Harrah's Operating 9 Company, Inc. 10 Miss Frank? 11 MS. FRANK: Duane Holloway also received 12 temporary qualification from the Commission on 13 October 14th of the last year. 14 A draft resolution on his plenary 15 qualification has been circulated. 16 And, again, Miss Hughes and Miss 17 Flaherty. 18 CHAIR KASSEKERT: Miss Hughes? 19 MS. HUGHES: Chair, Commissioners. 20 Again, once again, I have had an opportunity to 21 review the draft resolution. We have no 22 objection and ask that you adopt it. 23 CHAIR KASSEKERT: Thank you. 24 Miss Flaherty? 25 MS. FLAHERTY: Chair and Commissioners, 37 ITEM NO. 12 1 the Division reported with regard to Mr. 2 Holloway's plenary qualification by report 3 dated June 17th. We had no objection to his 4 qualification and, again, no issue with regard 5 to the draft resolution. 6 Thank you. 7 CHAIR KASSEKERT: Thank you. 8 Any questions? 9 COMMISSIONER SOMMELING: No questions, 10 Madame Chair. 11 COMMISSIONER FANELLE: Madame Chair, I 12 move to adopt the draft resolution and find 13 Duane Holloway qualified as to serve as Vice 14 President, Litigation and Labor Employment for 15 Harrah's Entertainment, Inc., and Harrah's 16 Operating Company, Inc. 17 COMMISSIONER EPPS: Second. 18 CHAIR KASSEKERT: Motion is made and 19 seconded. This is a roll call vote. 20 MR. NANCE: Commissioner Sommeling? 21 COMMISSIONER SOMMELING: Yes. 22 MR. NANCE: Commissioner Epps? 23 COMMISSIONER EPPS: Yes. 24 MR. NANCE: Commissioner Fanelle? 25 COMMISSIONER FANELLE: Yes. 38 ITEM NO. 13 1 MR. NANCE: Vice Chair Harrington? 2 VICE CHAIR HARRINGTON: Yes. 3 MR. NANCE: Chair Kassekert? 4 CHAIR KASSEKERT: Yes. 5 MR. NANCE: The record will reflect that 6 the motion is unanimous. 7 CHAIR KASSEKERT: Thank you. 8 MS. HUGHES: Thank you. 9 MS. FRANK: Thank you. 10 MR. NANCE: Item No. 13, petition of 11 Tropicana Atlantic City Corp. requesting 12 amendment to its certificat -- excuse me -- 13 operating certificate pursuant to NJSA 14 5:12-96(c) and casino license pursuant to NJSA 15 5:12-80, et seq. 16 Mr. Moncrief? 17 MR. MONCRIEF: Madame Chair, members of 18 the Commission, before you is a petition of 19 Tropicana Casino and Resorts seeking approval 20 to an amendment its operation certificate. 21 A draft resolution has been circulated 22 among the parties, and then I believe it's 23 acceptable to all the parties. If any 24 additional conditions are made after your 25 ruling today, they can be added to the draft 39 ITEM NO. 13 1 resolution. 2 Here for the Petitioner is Dennis Daly 3 and Tama Hughes and for the Division is DAG Tim 4 Ficchi. 5 CHAIR KASSEKERT: Thank you. 6 Mr. Daly, Miss Hughes, good morning. 7 MS. HUGHES: Good morning. 8 MR. DALY: Good morning. 9 I don't know if you want to go into a 10 great bit of detail about the -- what I'll 11 refer to as the original petition which was 12 supplemented. But looking at both together, 13 what it involves is both a contraction and 14 expansion of the casino floor at the Tropicana. 15 If this request is approved in toto, the 16 overall casino floor area will be reduced by 17 141,377 square feet to 138,130 square feet. 18 The floor plans have been provided to your 19 staff, and I'm sure shared with you as well, 20 regarding the specifics. 21 I think that the -- we can concentrate 22 on our presentation today, which I'll keep as 23 brief as possible, to the expansion into the 24 area known as the transportation center. 25 Documentation with respect to all that has also 40 ITEM NO. 13 1 been submitted to the staff and shared with the 2 Division of Gaming Enforcement. And we have 3 people available here to answer any questions 4 that the Commissioners might have. 5 But in the interests of expediency, I 6 would not propose to put them on the stand and 7 go through the normal direct and 8 cross-examination, questions from the panel. 9 However, after I go through these brief remarks 10 that I have, if the Commission has my specific 11 questions that either I or Miss Hughes cannot 12 respond to, we have Tropicana officials in the 13 audience who will certainly be able to address 14 any concerns that you have. 15 And, Madame Chair, I leave it to your 16 discretion as to whether you would rather them 17 have them do it simply from their seat in the 18 audience or have them brought up to the stand 19 and on the record. Whichever way you prefer is 20 fine. 21 With regard to the transportation 22 center, which as you know is located at the 23 ground level of Tropicana's West Tower, what 24 the proposal involves is inserting 55 slot 25 machines in what will be known as Slot Zone K, 41 ITEM NO. 13 1 and that will embrace 1820 square feet. There 2 will be no table games or other gaming 3 amenities except one ATR machine, and there 4 will be one ATM machine in that area. 5 With regard to personnel involved there, 6 there will be one slot attendant on duty at all 7 times. And, for the most part, two -- we 8 proffer that they'll be two security guards 9 available. Originally the Tropicana had 10 requested that one security post would be 11 sufficient. We still think that probably would 12 be adequate, but I know that the Commission has 13 expressed concerns through the staff. And so 14 what I would propose is that we initiate the 15 process with two security guards with the 16 understanding that after the end of the summer 17 crush, if I might call it that, the staff 18 review the situation sometime in September and 19 at least reconsider whether or not a single 20 security post wouldn't be sufficient to follow. 21 But as I've mentioned, we will initiate the 22 proposal with two security guards virtually at 23 all times. 24 With regard to equipment, most of the 25 cameras are already in place, and the remaining 42 ITEM NO. 13 1 cameras will be installed. And all that 2 information, of course, will be shared with 3 Principal Inspector Joe Pappa. And we will 4 take every step necessary to satisfy any 5 concerns that Mr. Pappa may have about the 6 location, number, and coverage of the security 7 cameras. I'd like, of course, for obvious 8 reasons not to get into that issue here, 9 although if the Commissioners have any concerns 10 about it, we'll be glad to address them and 11 request that we do so in closed session. 12 With respect to the windows and doors, I 13 know that the Commission had expressed through 14 its staff some concerns about the access and 15 ingress and egress to the area now for the 16 first time if approved will contain these slot 17 machines. Right now the situation is such that 18 there are two doors on Pacific Avenue that 19 allow both ingress and egress, and there is 20 another door on the Brighton Avenue side. The 21 transportation center, as you know, is bounded 22 on one side by Brighton Avenue and the other by 23 Iowa. These doors on the -- that face Pacific 24 Avenue, I would refer to them as the one 25 closest to Iowa -- 43 ITEM NO. 13 1 COMMISSIONER EPPS: Morris? 2 MR. DALY: I'm sorry? 3 COMMISSIONER SOMMELING: Morris Avenue. 4 MS. HUGHES: No. It is. It is Morris. 5 MR. DALY: It's Morris? 6 MS. HUGHES: It's Morris. 7 MR. DALY: Stand corrected. Morris 8 replaces Iowa? 9 MS. HUGHTES: Iowa. 10 VICE CHAIR EPPS: Atlantic City guy. 11 MR. DALY: Iowa -- 12 (Laughter.) 13 MR. DALY: We talk about, then, of the 14 two doors on Pacific Avenue, one's on the 15 Morris Avenue side, and one is on the Brighton 16 Avenue side. What we would propose is to 17 eliminate ingress from the Morris Avenue side 18 of Pacific Avenue, allowing ingress and egress 19 only from the Pacific Avenue entrance on the 20 Brighton Avenue side. And for the entrance 21 that currently exists on the Brighton Avenue, 22 we would make that exit-only as well. 23 There's also concern about the windows. 24 There is a large plate glass window that pretty 25 much runs the full length of the Pacific Avenue 44 ITEM NO. 13 1 side of the transportation center. That allows 2 presently visibility from the street into what 3 we hope will be a gaming area. The Commission 4 has asked, and we certainly will agree, to tint 5 those windows, effectively making them one-way 6 glass. You'll be able to see out from inside 7 but not in from outside. 8 With regard to juveniles, I know that 9 was another concern of the Commission. We will 10 take every reasonable measure to limit 11 juveniles access. There will be appropriate 12 signage indicating that it is a casino floor 13 area, the security guards will be appropriately 14 trained to identify underage personnel and keep 15 them from the gaming floor area except by way 16 of passage to another room or, if necessary, to 17 above. 18 I would note in that regard, there are 19 very few juveniles that come into the Tropicana 20 facility via the buses. At least as far as 21 those patrons who are coming for gambling. 22 There are some specific buses that bring in 23 students, but the plan with respect to them is 24 to allow them ingress and egress only from the 25 Brighton Avenue entrance. I had mentioned 45 ITEM NO. 13 1 before that the Brighton Avenue entrance would 2 be egress-only. It will be allowed ingress at 3 those occasions when the buses containing 4 students are brought in to go to the IMAX 5 theater or wherever else they are going inside 6 the Quarter. But they will not, as a routine 7 matter, be allowed into that area in the 8 transportation center which would now, again if 9 you approve it, contain slot machines. 10 And that's pretty much my presentation. 11 If you have any specific questions, as I 12 mentioned, we'll do our best to answer them and 13 provide people with the expertise to go into 14 more detail if you like. 15 CHAIR KASSEKERT: Thank you. 16 Let me ask if the Commissioners want to 17 ask questions or hear from Mr. Ficchi -- 18 COMMISSIONER SOMMELING: Ficchi, first. 19 CHAIR KASSEKERT: Whatever. What's your 20 preference? 21 COMMISSIONER SOMMELING: Let's hear from 22 Mr. Ficchi, first. 23 CHAIR KASSEKERT: Okay. 24 MR. FICCHI: I'll be very short. Good 25 morning, Commissioners and Madame Chair. 46 ITEM NO. 13 1 The Division has reviewed the draft 2 resolution, as Mr. Moncrief has indicated. The 3 Division has no objection to its passage, the 4 proposal as modified. There's no objection 5 from the Division. 6 CHAIR KASSEKERT: Thank you. 7 Commissioner Sommeling? 8 COMMISSIONER SOMMELING: Yeah. Dennis, 9 something just caught my ear when you're 10 talking about the students coming in. 11 MR. DALY: Uh-hum. 12 COMMISSIONER SOMMELING: You know, for 13 example, by bus. Would they then be ferreted 14 through, across the casino, the new casino 15 area, and up the escalator that are down there 16 to the main casino floor or to the -- 17 MR. DALY: Miss Hughes is going to 18 address that. 19 COMMISSIONER SOMMELING: Okay. 20 MS. HUGHES: Good morning. 21 The thought process here is either 22 relocate the vendors to gaming by the Palm and 23 the bus drop-off there for the students going 24 to the IMAX. Or if they're coming in through 25 Brighton, we would open the up the door. 47 ITEM NO. 13 1 There's a escalator right by the door, and the 2 kids go up the escalator, and they don't go 3 across the casino floor. There's access 4 through the West Tower. There's two separate 5 ramps that go into the Quarter area that are 6 not on the casino floor that will allow access 7 right into the Quarter where the kids would go 8 up to the IMAX theater. 9 COMMISSIONER SOMMELING: So they would 10 use the ropes -- the rope stands and then 11 ferret them up to the escalator, up to the next 12 floor. 13 MS. HUGHES: Yes. 14 COMMISSIONER SOMMELING: And there would 15 be a security officer there? In those 16 instances, I mean? 17 MS. HUGHES: Yes. We would -- make 18 sure -- well, we are going to have two security 19 guards down there already, so we will ensure 20 that nobody, no children go past -- go right up 21 the escalator and, once again, get taken via 22 one of the two passages into the Quarter to get 23 to the IMAX theater. 24 COMMISSIONER SOMMELING: And then I 25 assume, when they return, they're going to get 48 ITEM NO. 13 1 the bus at the bus area, so they would come 2 back down. 3 MS. HUGHES: It would be -- it would be 4 back down. Realistically, what we're going to 5 try on relocate is over towards the Palm. The 6 Carmine's and the Palm. There is a whole valet 7 section that is off of Pacific. There's an 8 entrance right there with two escalators that 9 go right up to -- and stairs -- that go right 10 up, right into the center of the Quarter. So 11 that's going to be our first preference. But 12 if we have to utilize Brighton Avenue, that's 13 exactly what we would do. 14 COMMISSIONER SOMMELING: Okay. Thank 15 you. 16 No further questions. 17 CHAIR KASSEKERT: Thank you. 18 Any more questions? Commissioners Epps? 19 COMMISSIONER EPPS: I guess I can be 20 accused of not being progressive enough on this 21 plan, but to be frank with you, the concept 22 gives me pause, particularly being remote and 23 street level, and then a transportation center 24 considering the nature of transportation 25 centers -- at least here, particularly late at 49 ITEM NO. 13 1 night. So all of those issues combined give me 2 a certain bit of pause in this concept. 3 I'm aware that Trop has some remote 4 locations, particularly towards the boardwalk, 5 and you've not had problems, I guess, there. 6 But I guess it's the uniqueness of, A, street 7 level and, B, a transportation center where 8 there is a particularly heightened degree of 9 lingering and people kind of just waiting 10 around for whatever reason. That makes me 11 particularly nervous about this type of 12 expansion of gaming. 13 So -- and I know you've -- what you said 14 is to address all of those concerns, and so 15 there's not much you can say. I don't think 16 there's a question there. I just want you to 17 understand where my -- where my hesitancy is 18 with respect to this type of expansion. I know 19 we need to be progressive and try new things, 20 and I understand that. I just want you to know 21 where my fears lie. 22 MR. DALY: Commissioner -- 23 MS. HUGHES: Let me -- maybe, hopefully 24 address some of the concerns that you have. 25 Hopefully, maybe alleviate some of them. 50 ITEM NO. 13 1 Tropicana is unique in that we already 2 have in our main complex gaming right off the 3 boardwalk. And we have, over the years, done 4 very well in securing that area, ensuring -- 5 because you get a lot of people flowing through 6 that, from the beach, from the boardwalk, from 7 the restaurants that we have down there. And 8 so we're very good at securing areas, that you 9 would think with the volume and the easy 10 access. Taking over to the transportation 11 center, understanding that this is something 12 new for Atlantic City and its gaming across 13 Pacific Avenue, and hearing what you're saying 14 about the bus access and early hours, 15 Tropicana's buses peak during, in essence, 16 normal business hours, not at 2:00 or 3:00 in 17 the morning. We have fewer buses that come in 18 in the early a.m. than we do during the course 19 of the day. So, once again, the volume going 20 through there, it's very manageable. If we're 21 concerned about the early wee hours of the 22 morning. And we have to be in tiptop shape, 23 like we do our casino floor during the normal 24 hours when we have the normal flow of traffic 25 during that hour. 51 ITEM NO. 13 1 I don't know if I've alleviated your 2 concerns, but we're confident because we've 3 done this, especially down in what we call the 4 Marketplace, that we're going to be well 5 equipped to handle your concerns that you have. 6 And we're certainly going to work very hard at 7 it. 8 COMMISSIONER EPPS: Just another 9 comment. It seems to me that you're going to 10 have to be particularly vigilant, different 11 than the boardwalk at Pacific Avenue in the 12 early morning hours, because the traffic there 13 is different, if you will. I'll leave it at 14 that. But and in and out of a gaming 15 environment in the middle of the night, just be 16 particularly vigilant. 17 CHAIR KASSEKERT: Thank you. 18 Any other questions? 19 VICE CHAIR HARRINGTON: Just to sort of 20 pick up on that, my particular concern -- and I 21 know it's been shared with you, and you're 22 paying attention to it, is the ingress and 23 egress from Pacific Avenue and just the 24 opportunities that that presents. So I will be 25 paying attention to that. 52 ITEM NO. 13 1 MR. DALY: As will we. 2 VICE CHAIR HARRINGTON: I'm confident 3 that you will. 4 MR. DALY: Thank you. 5 VICE CHAIR HARRINGTON: And this will be 6 24 hours; correct? 7 MS. HUGHES: And this will be 24 hours. 8 VICE CHAIR HARRINGTON: So -- 9 MS. HUGHES: And we will have security 10 and surveillance 24 hours. 11 VICE CHAIR HARRINGTON: Okay. Thank 12 you. 13 CHAIR KASSEKERT: Commissioner Fanelle? 14 Any questions? 15 COMMISSIONER SOMMELING: No more 16 questions, Madame Chair. 17 CHAIR KASSEKERT: Is there a motion? 18 COMMISSIONER SOMMELING: Madame Chair, I 19 move to adopt the draft resolution -- excuse me 20 for one second. 21 CHAIR KASSEKERT: Uh-hum. 22 COMMISSIONER SOMMELING: I'm on the 23 right page. 24 I move to adopt the draft resolution and 25 approve the petition of Tropicana Atlantic City 53 ITEM NO. 14 1 Corp. for an amendment to its certificate of 2 operation to permit the reconfiguration of its 3 casino floor subject to the conditions in the 4 resolution. 5 COMMISSIONER FANELLE: Second. 6 CHAIR KASSEKERT: The motion has been 7 made and seconded. All in favor? 8 (Ayes.) 9 CHAIR KASSEKERT: Opposed? 10 COMMISSIONER EPPS: Chair, I'm going to 11 abstain. 12 CHAIR KASSEKERT: Okay. Thank you. 13 The motion passes 4/0 with one 14 abstention. 15 Thank you. 16 MS. HUGHES: Thank you. 17 MR. DALY: Thank you. 18 MR. NANCE: Item No. 14, petition of IGT 19 for permission to transfer a progressive 20 annuity slot jackpot pursuant to NJAC 21 19:45-1.39(n). 22 Mr. Briliant? 23 MR. BRILIANT: Good morning, Madame 24 Chair and Commissioners. 25 Mr. Previti is here on behalf of IGT, 54 ITEM NO. 14 1 and Mr. Kimmel is here on behalf of the 2 Division. 3 We have circulated the proposed draft 4 resolution. 5 The matter is now before you. 6 CHAIR KASSEKERT: Thank you. 7 Good morning, Mr. Previti. 8 MR. PREVITI: Good morning, Chair, 9 Commissioners. We've reviewed the draft 10 resolution and ask that you adopt it. 11 I'm here to answer any questions you 12 might have about the transfer. 13 CHAIR KASSEKERT: Thank you. 14 Mr. Kimmel? Good morning. 15 MR. KIMMEL: Good morning, Chair. 16 The Division has reviewed the draft 17 resolution, has no objection to its adoption. 18 Thank you. 19 CHAIR KASSEKERT: Thank you. 20 Any questions? 21 COMMISSIONER SOMMELING: No questions, 22 Madame Chair. 23 COMMISSIONER EPPS: Madame Chair, I move 24 that we adopt the draft resolution and grant 25 the relief requested by IGT to permit the 55 ITEM NO. 15 1 progressive annuity slot jackpot transfer 2 subject to compliance with the 30-day notice 3 requirement of NJAC 19:45-1.39(d) -- 39(n). 4 VICE CHAIR HARRINGTON: 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 MR. NANCE: Item No. 15, petition of IGT 12 for permission to transfer a progressive 13 instant-pay slot jackpot pursuant to NJAC 14 19:45-1.39(n). 15 Mr. Briliant? 16 MR. BRILIANT: This is another slot 17 jackpot petition, and the same parties are here 18 before you. 19 CHAIR KASSEKERT: Thank you. 20 Again, Mr. Previti? 21 MR. PREVITI: Good morning again. 22 And, again, we've reviewed the draft 23 resolution and have no objection to you 24 adopting it and would ask that you do adopt it. 25 Thank you. 56 ITEM NO. 15 1 CHAIR KASSEKERT: Thank you. 2 Mr. Kimmel? 3 MR. KIMMEL: Reviewed this draft 4 resolution, including the fact that they 5 switched systems on me. And I have no 6 objection to its adoption. 7 CHAIR KASSEKERT: Thank you. 8 Any questions? 9 COMMISSIONER SOMMELING: No questions, 10 Madame Chair. 11 COMMISSIONER EPPS: Move that we adopt 12 the draft resolution and grant the relief 13 requested by IGT to permit the progressive 14 instant-pay slot jackpot transfer subject to 15 compliance with the 30-day notice requirement 16 in NJAC 19:45-1.39(n). 17 COMMISSIONER SOMMELING: 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 MR. PREVITI: Thank you. 57 ITEM NO. 16-17 1 MR. NANCE: Item No. 16 has been 2 adjourned without a date. 3 Item No. 17, proposed temporary adoption 4 and new rule concerning multi-casino bad beat 5 payout system. 6 Mr. Briliant? 7 MR. BRILIANT: Madame Chair, this 8 proposal was requested by the four Harrah's 9 Entertainment properties. It would permit two 10 or more casino licensees to offer a 11 multi-casino bad beat payout in the authorized 12 game of poker. The payout will be administered 13 by a multi-casino bad beat payout system 14 similar to the present multi-casino slot 15 systems that are described in the Commission's 16 regulations. 17 CHAIR KASSEKERT: Thank you. 18 Any questions for Mr. Briliant? 19 COMMISSIONER SOMMELING: No questions, 20 Madame Chair. 21 VICE CHAIR HARRINGTON: I'll move that 22 we -- 23 COMMISSIONER EPPS: Move to approve for 24 temporary adoption. 25 I'm sorry. 58 ITEM NO. 18 1 VICE CHAIR HARRINGTON: I'll second. 2 CHAIR KASSEKERT: The motion has been 3 made and seconded. All in favor? 4 (Ayes.) 5 CHAIR KASSEKERT: Opposed? 6 (No response.) 7 CHAIR KASSEKERT: Motion carries. 8 MR. NANCE: Item No. 18, petition of 9 Aristocrat to possess and display slot machines 10 pursuant to NJAC 19:46-1.22(b). 11 Mr. Briliant? 12 MR. BRILIANT: Okay. Marie Jones is 13 here on behalf of the Petitioner. Mr. Kimmel 14 is here on behalf of the Division. 15 CHAIR KASSEKERT: Thank you. 16 Ms. Jones? 17 MS. JONES: Good morning, Chair, 18 Commissioners. 19 This is the application of Aristocrat 20 for approval nunc pro tunc to have slot 21 machines for demonstration purposes at the 22 Chelsea Hotel. 23 You have the petition of Aristocrat, and 24 I'd be happy to address any questions you have. 25 CHAIR KASSEKERT: Thank you. 59 ITEM NO. 18 1 Mr. Kimmel? 2 MR. KIMMEL: Since it's already 3 occurred, we have no objection. 4 (Laughter.) 5 CHAIR KASSEKERT: That's why we do nunc 6 pro tunc. 7 Any questions? 8 COMMISSIONER SOMMELING: No questions, 9 Madame Chair. 10 Move to adopt the draft resolution and 11 grant nunc pro tunc the relief requested by 12 Aristocrat to possess and display slot machines 13 pursuant to NJAC 19:46-1.22(b) subject to the 14 conditions of the resolution. 15 COMMISSIONER EPPS: 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 MS. JONES: Thank you. 23 CHAIR KASSEKERT: Thank you. 24 MR. BRILIANT: Thank you. 25 MR. KIMMEL: Thank you. 60 ITEM NO. 19 1 MR. NANCE: Item No. 19, petition of TPG 2 Genpar V, LP, and TPG Advisors V, Inc., for 3 approval of a restructuring agreement and other 4 relief. 5 Miss Wozniak? 6 MS. WOZNIAK: Good morning, Chair, 7 Commissioners. 8 Mr. O'Gara is here on behalf of the 9 Petitioner and Miss Flaherty for the Division. 10 And I have circulated a draft 11 resolution. 12 CHAIR KASSEKERT: Thank you. 13 Mr. O'Gara? 14 MR. O'GARA: Yeah. Good morning. The 15 petition -- we have no objection to the draft 16 resolution. We don't want anybody to seal 17 anything that's in this report because it's 18 probably incomprehensible if you don't have all 19 the charts. 20 All this is is simply a substitution of 21 the advisory entity of Genpar V. Each of the 22 TPG funds, of which there are now seven, has a 23 general partner. Each of them has an advisor. 24 That advisor is then controled by Bonderman & 25 Coulter. This is three new entities that will 61 ITEM NO. 19 1 be still controlled by Bonderman & Coulter. It 2 simply changes economics, not the ownership of 3 Harrah's, but the economics of what are called 4 carried interests and fees, will allow them to 5 now be consolidated on a common platform so 6 that TPG will be in a position to do what 7 Apollo and Blackstone and KPAR have done, which 8 is to list on NYSE Euronext. 9 CHAIR KASSEKERT: Miss Flaherty? 10 Can you translate that, Miss Flaherty? 11 (Laughter.) 12 MS. FLAHERTY: I can try. 13 It has to do with, obviously, the new 14 entities that are coming in that will be 15 discretionary qualifiers, and we have no 16 objection to their qualification. And to the 17 fact that they are requesting continued waiver 18 from the non-qualification requirement as to 19 the limited partners as well. 20 We submitted a report dated July 8th, 21 which included the results of our review and 22 analysis of the relief requested. We have no 23 objection to the relief. We recommend the 24 conditions regarding notification and the 25 receipt of documentation which are incorporated 62 ITEM NO. 19 1 in the draft resolution, and we have no issue 2 with the draft resolution. 3 Thank you. 4 CHAIR KASSEKERT: Thank you. 5 Any question? 6 COMMISSIONER SOMMELING: No questions, 7 Madame Chair. 8 VICE CHAIR HARRINGTON: I will move that 9 we adopt the draft resolution and grant the 10 relief requested in the petition and approve 11 the TPC restructuring -- TPG restructuring -- 12 subject to the conditions and to the extent set 13 forth in the resolution. 14 COMMISSIONER FANELLE: Second. 15 CHAIR KASSEKERT: Motion is made and 16 seconded. This is a roll call vote. 17 MR. NANCE: Commissioner Sommeling? 18 COMMISSIONER SOMMELING: Yes. 19 MR. NANCE: Commissioner Epps? 20 COMMISSIONER EPPS: Yes. 21 MR. NANCE: Commissioner Fanelle? 22 COMMISSIONER FANELLE: Yes. 23 MR. NANCE: Vice Chair Harrington? 24 VICE CHAIR HARRINGTON: Yes. 25 MR. NANCE: Chair Kassekert? 63 ITEM NO. 20 1 CHAIR KASSEKERT: Yes. 2 MR. NANCE: The record will reflect that 3 the motion is unanimous. 4 CHAIR KASSEKERT: Thank you. 5 MR. O'GARA: Thank you. 6 CHAIR KASSEKERT: We now adjourn to 1 7 p.m. when we will come back to consider Items 8 20 and 21. 9 Thank you. 10 MS. FLAHERTY: Thank you. 11 (A recess was taken from 11:23 a.m. to 12 1:24 p.m.) 13 KASSEKERT CHAIR: Thank you. We'll go 14 back on the record. 15 MR. NANCE: Item No. 20, petition of 16 Avenue New Jersey Entertainment, LLC, for 17 interim casino authorization pursuant to NJSA 18 5:12-95.13; amended petition of Avenue New 19 Jersey Entertainment, LLC, for approval of a 20 trust agreement and amended petition of Avenue 21 Capital Management II, Limited Partners, for 22 declaratory rulings as to the completeness of 23 an application to be found qualified. 24 Miss Wozniak? 25 MS. WOZNIAK: Good afternoon, Chair and 64 ITEM NO. 20 1 Commissioners. I would ask that counsel enter 2 their appearances, please. 3 MR. CASIELLO: Good morning, Madame 4 Chair -- or good afternoon, Madame Chair and 5 Commissioners. Nick Casiello and Pat Madamba 6 from the law firm of Fox Rothschild. 7 MR. FOGARTY: Good afternoon. James 8 Fogarty, Deputy Attorney General, of the 9 Division of Gaming Enforcement. 10 CHAIR KASSEKERT: Good afternoon. Thank 11 you. 12 The matter before us this afternoon is 13 the application of Avenue New Jersey 14 Entertainment for interim casino authorization 15 as a holding company of three Trump casino 16 licensees. ICA is essentially a form of 17 temporary qualification. It allows he 18 applicants to acquire an interest in the 19 licensee or holding company prior to plenary 20 qualification. In order to evaluate the 21 statutory criteria for ICA, the Commission will 22 hear testimony this afternoon. 23 First there are exhibits that have been 24 premarked which Mr. Nance will now identify for 25 the record. 65 ITEM NO. 20 1 MR. NANCE: Chair, Commissioners, the 2 premarked exhibits are as follows: 3 The Casino Control Commission has one, 4 Exhibit C-1 for identification only. Which is 5 a draft resolution. 6 Division of Gaming Enforcement has one 7 exhibit. It has been premarked as D-1. D-1 is 8 a report dated June 29th, 2010, regarding 9 Petition No. 0531002, 2680906, and 0471004. 10 The Applicant has two exhibits. They've 11 been premarked as Exhibit A-1 and A-2. A-1 is 12 a chart depicting Avenue Capital Group's 13 structure for holding its interests in 14 reorganized Trump Entertainment Resorts, Inc. 15 And A-2 is a first amended and restated trust 16 agreement dated as of June 16th, 2010. 17 CHAIR KASSEKERT: Thank you. 18 Are there any sealing requests, Mr. 19 Casiello? 20 MR. CASIELLO: Yeah. There is a sealing 21 request, Madame Chair, with respect to A-2, the 22 trust agreement. 23 CHAIR KASSEKERT: Thank you. 24 Are there any objections to the 25 admission of these exhibits? 66 ITEM NO. 20 1 MR. CASIELLO: No objection. 2 CHAIR KASSEKERT: Mr. Fogarty? 3 MR. FOGARTY: No objection from the 4 Division. We've seen the sealing request. We 5 have no objection to that, either. 6 CHAIR KASSEKERT: Thank you. 7 Accordingly, I will, therefore, move these into 8 evidence. 9 Are there any other procedural matters 10 that need to be brought before us at this time? 11 MR. CASIELLO: No, Madame Chair. 12 CHAIR KASSEKERT: Okay. Mr. Fogarty? 13 I'm assuming none. 14 MR. FOGARTY: I have nothing else. 15 CHAIR KASSEKERT: Thank you. All right. 16 We'll begin with Mr. Opening statements. 17 Mr. Casiello? 18 MR. CASIELLO: Madame Chair, I'm going 19 to waive an opening on this matter. I would 20 like to take the opportunity, though, to 21 introduce a number of people who are here today 22 from both Avenue and Trump Entertainment 23 Resorts. 24 Let me start with Avenue. Mr. Marc 25 Lasry, who is Chairman and CEO of Avenue 67 ITEM NO. 20 1 Capital. Rob Symington, who is Senior 2 Portfolio Manager. David Licht, who is Senior 3 Vice President. 4 We also have with us today here today 5 the Honorable Richard J. Williams, the proposed 6 ICA trustee for Avenue Capital. 7 From Trump Entertainment Resorts we have 8 Mark Juliano, the CEO. Bob Pickus, the CAO and 9 General Counsel and Secretary. John Burke, who 10 is the CFO and Corporate Treasurer. Joe -- 11 there's Mr. Burke. Joe Fusco, Executive Vice 12 President, Government Affairs. Rosalind 13 Krause, who is general manager of the Taj. Jim 14 Rigot, General Manager of the Trump Plaza. And 15 Mark Sachais, General Manager of Trump Marina. 16 We also have with us here today the 17 proposed new outside directors of Trump 18 Entertainment Resorts, Mr. Gene Davis, Stephen 19 McCall, and Jeff Gilbert. 20 Thank you. 21 CHAIR KASSEKERT: Thank you. 22 Mr. Fogarty? 23 MR. FOGARTY: I have nothing -- I'm 24 going to waive the opening statement on this 25 application, not on the next one coming up, 68 ITEM NO. 20 1 except to say that we have done a letter report 2 to you dated June 4th, which I -- is part of 3 the record regarding the -- our recommendation 4 to you to qualify former Judge Williams as the 5 ICA trustee. I'm not sure when in this 6 proceeding you were going to get to that, so I 7 might have jumped that on you. But I just want 8 to make that clear that that report, positive 9 report, is before you. 10 CHAIR KASSEKERT: Thank you. 11 We'll move to testimony. Mr. Casiello, 12 you may call your first witness. 13 MR. CASIELLO: Thank you. I'd like to 14 call Marc Lasry to the witness stand, please. 15 CHAIR KASSEKERT: Mr. Lasry, if you will 16 remain standing, Mr. Nance will swear you in. 17 18 MARK LASRY, was duly sworn to testify in 19 this matter. 20 21 MR. NANCE: Please state your name for 22 the record. 23 THE WITNESS: Marc Lasry. 24 MR. NANCE: Please spell your name for 25 the record. 69 Lasry - direct - Casiello 1 THE WITNESS: M-a-r-c and then 2 L-a-s-r-y. 3 MR. NANCE: Thank you. 4 CHAIR KASSEKERT: Thank you. 5 You may proceed, Mr. Casiello. 6 MR. CASIELLO: Thank you. You can sit 7 down, although you've been sitting for a few 8 hours, haven't you? 9 CHAIR KASSEKERT: Stuck in traffic, I 10 understand. 11 THE WITNESS: I apologize. There was a 12 jackknifed tractor trailer, so the Jersey 13 Turnpike was backed up. 14 15 DIRECT EXAMINATION BY MR. CASIELLO: 16 Q. By whom are you employed and in what 17 position? 18 A. Employed by Avenue Capital. And I am 19 the Chairman, CEO, and founder of the firm. 20 Q. Okay. And you're also the -- a member 21 of one of the entities -- 22 A. Avenue New Jersey Entertainment Holdings 23 and also Avenue New Jersey Entertainment. 24 Q. Okay. And one of the those entities 25 holds the voting interests -- 70 Lasry - direct - Casiello 1 A. That's correct. 2 Q. -- that will control your investment in 3 Trump Entertainment? 4 A. That's correct. 5 Q. When was Avenue Capital founded? 6 A. It was founded in 1995 by my sister and 7 I. 8 Q. And what is that Avenue Capital? 9 A. Avenue Capital manages approximately 20 10 billion. And mainly what we do is invest it in 11 distressed companies. We invest in either the bank 12 note or the senior secured notes. 13 Q. Does Avenue currently hold any 14 investment in Trump Entertainment Resorts? 15 A. Yes, we do. 16 Q. And what is that investment? 17 A. We own approximately, I think, about 172 18 million of the senior notes. 19 Q. Later on in the next matter on the 20 agenda we will get into the details of the Trump 21 bankruptcy plan of reorganization, but right now I 22 just want to focus Avenue's role in the bankruptcy 23 plan of reorganization process. What role has it 24 played? 25 A. We've been the lead in the negotiations 71 Lasry - direct - Casiello 1 and on the ad hoc committee. One, because we were one 2 of the largest holders of those bonds. And we've been 3 pushing for the reorganization for the company to come 4 out of bankruptcy. Mainly because our view is, you 5 know, we were pretty -- a very big believer in what's 6 going on with Atlantic City and in the three casinos. 7 Q. Okay. Part of the plan submitted by the 8 ad hoc committee and the debtors and approved by the 9 bankruptcy court involves a rights offering. Can you 10 explain what that is, briefly? 11 A. Sure. It's a $225 million rights 12 offering. And it enables the bondholders, the note 13 holders, and other unsecured debt -- other unsecured 14 holders to be able to purchase common sock in the new 15 entity. And then Avenue and the other members of the 16 ad hoc committee ended up agreeing to backstop that 17 for 225 million if other people didn't want any of 18 that equity. 19 Q. Okay. And what was Avenue's investment 20 in that rights offering? 21 A. It's approximately 52 million. I think 22 it's about 52 and a half million. 23 Q. And as a result of Avenue's 24 participation in the rights offering, the backstop 25 agreement, and that the -- the conversion of some of 72 Lasry - direct - Casiello 1 the -- of the debt into equity, approximately how many 2 shares will Avenue hold in reorganized Trump? 3 A. I think we'll have about -- 4 Q. Or a percentage is fine. 5 A. Yeah. 2.3 million shares, and I think 6 we'll have about 21.7 percent. 7 Q. Thank you. 8 What happens to the existing board of 9 directors of Trump under the plan? 10 A. There's going to be a new board that's 11 going to be constituted, so the old board will no 12 longer be there. 13 Q. Okay. How many members will there be on 14 the new board? 15 A. I think on the new board we'll have 16 seven members. Myself, Rob Symington, David Licht, 17 and then the three individuals Gene, Jeffrey, and 18 Stephen. 19 Q. Okay. 20 A. And I think also Mark. 21 Q. Right. Who's going to be chairman? 22 A. I am. 23 Q. Okay. And what is Rob's -- Rob 24 Symington's position at Avenue Capital? 25 A. He is the Senior Portfolio Manager. 73 Lasry - direct - Casiello 1 Q. And -- I'm sorry. 2 A. On the US distressed side. 3 Q. And what's David Licht's position? 4 A. David is the person who's been 5 responsible for this investment for us from the 6 beginning. And he's the Senior Vice President. 7 Q. Okay. Who are the members of the Audit 8 Committee at Trump Entertainment once the plan is 9 approved? 10 A. It's going to be Gene, Steve, and 11 Jeffrey. 12 Q. Okay. Can you tell us something about 13 the backgrounds of Mr. Davis and Steve McCall, and 14 Jeff Gilbert? 15 A. Sure. I mean, Gene has a consulting 16 company. He's president of that consulting company. 17 And he has sat on a number of public boards. Jeffrey 18 is -- has been a casino executive for over 35 years. 19 And Steve is the founder of a mid-market private 20 equity firm and also sits on a number of public 21 boards. 22 Q. You testified earlier that you will be 23 one of the members of the entity that controls the 24 interests in Trump Entertainment Resorts. Who will 25 the other person be? 74 Lasry - direct - Casiello 1 A. It will be Sonia Gardner. 2 Q. And what's her position with Avenue 3 Capital? 4 A. She's the other person who founded the 5 company with me. And she's the President of the 6 Avenue Capital. 7 Q. Okay. You said earlier that Avenue held 8 about 172 or so million dollars of the senior secured 9 notes, which are basically being wiped out in the 10 bankruptcy and that Avenue has invested about $52.6 11 million in the rights offering. Why is Avenue 12 investing all that money in Trump Entertainment? 13 A. Well, it's our belief that going forward 14 we have three unique properties, and we think with 15 those properties that we're investing today, and what 16 we think is sort of at the low point of the cycle 17 because of what happened in '08 and what happened in 18 '09. So when we look at it going forward, we think 19 there's a huge amount of upside for the casinos and 20 for Atlantic City. 21 Q. All right. What does Avenue as a 22 largest owner of Trump bring to the table? 23 A. Well, I think for about 25 years, all 24 we've done is focused, you know, on distressed 25 companies and troubled companies and how to turn them 75 Lasry - cross - Fogarty 1 around. So we think we bring a lot of expertise in 2 that manner. And, also, I think what we also bring is 3 capital. So we're able to bring -- I think our 4 experience in turning around companies, but also we're 5 able to bring capital, which I think is extremely 6 needed today. 7 Q. And would Avenue be willing to invest 8 more money in the company if necessary? 9 A. I think if necessary. I mean, yes. I 10 think we would. I mean, you know, going forward when 11 we look at it, we do think it's a pretty good 12 opportunity. 13 Q. Thank you, Mr. Lasry. 14 MR. CASIELLO: I have no further 15 questions. 16 CHAIR KASSEKERT: Thank you. 17 Cross-examination, Mr. Fogarty? 18 19 CROSS-EXAMINATION BY FOGARTY: 20 Q. Hello, Mr. Lasry. Nice to meet you. 21 A. Nice to meet you, too. 22 Q. Sorry if I chat a little. 23 What little I've learned about your 24 background, and it's been very little, but it struck 25 me that you were -- your business activities were more 76 Lasry - cross - Fogarty 1 in distressed companies. More -- more as a trader, if 2 you will, as a debt holder, a senior debt holder in 3 companies. And that this seems to be a little 4 different for Marc Lasry going forward. Is that a 5 fair comment to make? 6 A. No. 7 Q. What I mean, different is -- 8 A. Sure. 9 Q. You're going to be a chairman of a 10 gaming company, and you're going to be -- your 11 company, your Avenue Capital, is going to be the 12 single largest stockholder of it. And that just 13 strikes me as something different than the kinds of 14 stuff you had done in the past in the business world. 15 A. Well, I've never been Chairman of a 16 gaming company, so, yes. I think that would be 17 different. But we have been a voting equity in a 18 number of other companies. I thought that for this, 19 and for the amount of investment that we were putting 20 in and our role in how active we were, I thought it 21 was important for me to be involved in it from day one 22 and from the beginning. 23 Q. So, I mean, you're going to be in a 24 position of control, obviously. 25 A. I think we're going to own 21 percent. 77 Lasry - cross - Fogarty 1 So I think we'll also have a pretty big stake of what 2 goes forward. 3 Q. Are you excited about that opportunity? 4 Do you think you can make a difference? 5 A. You know, I would say I'm nervous about 6 it. I'm very excited about it. I think it's a 7 phenomenal opportunity, but at the same time I think 8 there's a lot of challenges. So I hope we'll be able 9 to do a good job. 10 Q. And I understand you on direct to say 11 that if the companies need funds for whatever reason 12 going forward, don't make their projections as they 13 told us about them, or the competition from the 14 surrounding states becomes more than anticipated, or 15 for whatever reason, is your company willing to step 16 up to the plate and step in? 17 A. I don't think it's for whatever reason. 18 I think it's going to depend on why they need the 19 extra capital. What are the opportunities? What's 20 happened? So I think we'll need to look at these 21 situations. We we've got a great deal of capital. 22 We're willing to spend that, and we're willing to 23 invest it. We believe that going forward there's a 24 huge opportunity. I mean, I think that's the best way 25 to answer that. 78 Lasry - cross - Fogarty 1 Q. What key things are you going to be 2 looking at as we go forward, say, for the next two 3 years or so? The license of these casinos are up 4 again for renewal in June 2012. Roughly the next two 5 years. What are you going to be keyed into? One 6 thing or a few things that you're trying to pay 7 specific attention to make a determination that things 8 were going okay or not going okay or whether you got 9 to step in with more capital or like that? 10 A. Okay. I think a lot of it is sort of -- 11 part of it is the macro of what's happening within the 12 industry and what's happening with the economy. I 13 think there's going to be some factors I'm not going 14 to be able to control. Obviously, with what's 15 happening in the economy. I think the parts that we 16 are going to try to do, which hopefully will be a 17 little bit different, is try to make it a little bit 18 of a better experience for people. I think try to do 19 things hopefully a little bit better, more a blocking 20 and tackling. I wish I could tell you that we have a 21 unique idea, and with that unique idea we're going to 22 come in, and we think we're going to change everything 23 that's there. I don't think so. I think we have a 24 pretty -- we have a very good management team. I 25 think we have great assets. And I think going forward 79 Lasry - cross - Fogarty 1 with -- with those two things we should be able to do 2 very well. 3 Q. Do you or Avenue Capital expect to take 4 out any cash dividends or distributions between now 5 and June of 2012? 6 A. No. Not at all. I think that going 7 forward really what we're going to be doing is putting 8 the money back into the company going forward. 9 Q. What about Polygon, Contrarian, and the 10 other institutional investors? Do you expect them to 11 take the cash or expect them to take the cash out of 12 the company? 13 A. I can't speak for them. But I would say 14 that if we're not taking anything out, they're not 15 taking anything out. I mean, I'm not going to allow 16 other people to take capital out. 17 Q. Thank you, sir. 18 MR. FOGARTY: That's all I have, Chair. 19 CHAIR KASSEKERT: Thank you. 20 Mr. Lasry, coming into this sort of from 21 the outside, I mean, you're obviously new to 22 gaming, as Mr. Fogarty noted, what do you think 23 Atlantic City needs to do to change, especially 24 with the challenges not just the economy, the 25 competition, table games in Pennsylvania. What 80 Lasry 1 is your vision of Atlantic City? 2 THE WITNESS: I think my vision is -- I 3 think ultimately what you have here is you have 4 great assets. It's how do we get people to 5 come here? 6 CHAIR KASSEKERT: Uh-hum. 7 THE WITNESS: It really is. And how are 8 we going to get individuals and families to 9 want to come to AC? And I think if we can end 10 up doing that and have more and more people 11 making more of an experience, I think then 12 people will be coming here. It's -- if all we 13 focus on is purely the gambling aspect, I think 14 then there's going to be issues. Because then 15 it's easier to go gamble, whether it's 16 Pennsylvania or other areas. I think we've got 17 to make it a little bit more this is a spot 18 where you want to come. This is where you want 19 to bring your families. It's more you're going 20 to have a gambling and everything else that's 21 going to be enjoyable. But we want to make it 22 more of an experience for people. And, look, I 23 think that's difficult. I'm not going to tell 24 you I think that's going to be easy. 25 CHAIR KASSEKERT: Uh-hum. 81 Lasry 1 THE WITNESS: I think it's a challenge. 2 I think it's a challenge for us. I think it's 3 a challenge or all of Atlantic City and for all 4 the other casinos. And when you look at it, 5 sort of, you know, year in, year out, it looks 6 like things keep dropping. And part of that 7 is, I think there's been a focus purely on the 8 gambling aspect, and for us, I think we want to 9 try to make it more of a focus on sort of 10 hopefully the entertainment aspect but the 11 family aspect. 12 CHAIR KASSEKERT: Do you foresee keeping 13 all three properties? Is there any -- do you 14 have any thoughts about there are three 15 properties associated with that, the Marina, 16 Trump Plaza, and the Taj? What are your 17 thoughts about keeping all three? Looking for 18 a sale? Looking to do something else? 19 THE WITNESS: I mean, I think we'd like 20 to sell one of the properties. 21 CHAIR KASSEKERT: Uh-hum. 22 THE WITNESS: I don't know if this is -- 23 I mean, I'm happy to say each one. I think you 24 guys know. 25 (Laughter.) 82 Lasry 1 THE WITNESS: But we'll keep it hush 2 because it's on TV. 3 (Laughter.) 4 THE WITNESS: So don't tell anybody 5 right now. But I think our focus is there's 6 been a number of parties who have come to us 7 who have expressed that they think they can 8 turn one of those properties into something 9 pretty unique. And, you know, when we look at 10 that, I think us focusing on the other two 11 properties would actually be very helpful. 12 Especially if somebody is coming in. 13 I'm a big believer that the more you can 14 make the other properties better, I think 15 that's good for everybody. It's not -- it's 16 not let's have less casinos. I think it's more 17 let's give people more of a choice. 18 CHAIR KASSEKERT: Uh-hum. 19 THE WITNESS: So I think for us, if 20 we're able to do that, that's great. But I 21 think one of the things we would do with that 22 capital is we would end up -- I mean, the way 23 our agreement is, we would have to end up 24 paying down our bank debt. 25 CHAIR KASSEKERT: And do you foresee -- 83 Lasry 1 as a result of that, do you foresee any 2 significant capital expenditures at any of 3 these properties at this point? 4 THE WITNESS: I don't think in the next 5 six months or a year. I think the Plaza needs 6 some capital expenditures. I think the Taj is 7 fine. 8 CHAIR KASSEKERT: Uh-hum. 9 THE WITNESS: And I think the Marina has 10 its issues. 11 CHAIR KASSEKERT: Questions from the 12 commissioners? 13 Commissioner Epps? 14 COMMISSIONER EPPS: First question is 15 your MO in the past has been distressed 16 companies, and that's been testified to 17 clearly. What then is a win for Avenue Capital 18 in this scenario? How do you define a win, a 19 victory in this investment? 20 THE WITNESS: Well, I think for us when 21 we invest in distressed companies, our goal is 22 really to invest in what we think are very good 23 companies that are just over-levered. It's not 24 a focus of is the company in massive trouble, 25 and we need to turn everything around. I think 84 Lasry 1 when you look at Trump, the biggest issue Trump 2 had is it was just massively over-levered. 3 You've got three great assets. So for us, I 4 think the win, we're already there. 5 You know, to be honest with you about 6 it, I think for us we wanted to end up owning 7 that equity. We believe that five years from 8 now that equity is worth a huge amount of 9 money. And hopefully we're right. I mean, 10 that's -- that's the bet we're making with our 11 capital and with -- and I think with the other 12 members of the ad hoc committee is that we 13 believe over the course of the next five years, 14 a lot of value is going to be created. So when 15 we invested in the bonds, we didn't invest in 16 the bonds thinking we were going to be taken 17 out of at par. We invested in bonds believing 18 we were going to end up owning the equity of 19 this company. So I think we're there. 20 And then the question is really over the 21 next couple of years, are we he going to be 22 able to many execute on that? And is the 23 economy going to help us? We think right now, 24 we won't do get into the politics whether who 25 is doing a great job with this administration, 85 Lasry 1 but, you know, the real issue is are things 2 turning? And I would have said to you six 3 months ago, we were probably more positive 4 about the economy. And I would say to you 5 today we're still positive about the economy, 6 but I think it's taking a little -- it's going 7 to take a little bit longer. So I think the 8 turn that you would see in AC would probably 9 occur -- you know, we thought it would be take 10 two to three years. I think now it would take 11 two to three years. 12 COMMISSIONER EPPS: So, then, is it fair 13 to say that over the five-year -- a five-year 14 period or so, you would be looking to increase 15 revenue and generate revenue out of the company 16 as opposed to something else, some other 17 indicator? 18 THE WITNESS: I think right now we're 19 looking at this as being an investment for us, 20 which is very long term. And how do we 21 increase -- how do we make AC better? But at 22 the same time, how we end up making the hotels 23 and casino operations better? And I think that 24 is probably a two-to-five-year process. 25 COMMISSIONER EPPS: Okay. And my second 86 Lasry 1 focus speaks to some of the testimony you just 2 gave the Chair concerning your three -- or two 3 of your three properties. You got -- 4 THE WITNESS: Yes. 5 COMMISSIONER EPPS: -- two pretty 6 uniquely situated properties. 7 THE WITNESS: Right. 8 COMMISSIONER EPPS: You've got one that 9 is uptown near what potentially could be the 10 next thriving area of the city. 11 THE WITNESS: Uh-hum. 12 COMMISSIONER EPPS: If things take off. 13 And you're pretty much at the center of that 14 right now. You are, I guess, the catalyst in 15 that area right now. And that seems to be 16 doing well for you. You've also got center 17 boardwalk. 18 THE WITNESS: Uh-hum. 19 COMMISSIONER EPPS: Which is another 20 great place to be, but maybe you've got a 21 little bit more challenges there. But you have 22 some acreage. Is there any intention of 23 expanding that and maybe going up or out or -- 24 THE WITNESS: I don't know. I mean, I 25 think as we look at it, I think you hit it on 87 Lasry 1 the head. I think we have a lot of unique 2 properties and they're uniquely situated. The 3 question is going to be for us, you know, where 4 do we want to end up spending more capital to 5 try to make it better? And do we think -- do 6 we think people will come to that? 7 I think over the course of the next six 8 months, that's going to be a huge focus of 9 ours. It's been kind of hard, to be blunt, to 10 be focused on that over the last six months 11 because really the focus has been on getting 12 the company out of bankruptcy and dealing with 13 all those issues. I think hopefully by 14 tomorrow when we will all meet again as a 15 group, the focus is going to be, all right, 16 what are we going to do with the properties? 17 How do we make things better? And how can we 18 end up having people come to those? So I 19 think, you know, you would think you were at 20 our meetings. So I think you've actually hit 21 it on the head. 22 COMMISSIONER EPPS: And the last 23 question is, does Avenue change or have any 24 intention of changing the Trump brand? The 25 image that is the Trump properties in Atlantic 88 Lasry 1 City, is there some change to the brand that 2 Avenue brings, or do you feel that is just 3 business as usual, just do it better and more 4 efficiently? 5 THE WITNESS: Well, I mean, I think if 6 Donald was here, he wouldn't be happy about 7 that, changing the brand. 8 (Laughter.) 9 THE WITNESS: You know, I think it is -- 10 the brand itself is fine. I think what has 11 been lacking is a lot of the attention that was 12 needed and sort of the focus on it. I think -- 13 I think we're going to try to do things and try 14 to execute better, mainly because that's going 15 to be the sole focus. So I don't think today 16 we need to change the brand at all. 17 COMMISSIONER EPPS: Fair enough. 18 I have -- I'm done. 19 CHAIR KASSEKERT: Commissioner 20 Sommeling, any questions? 21 COMMISSIONER SOMMELING: Yes. 22 In regard to the three properties, do 23 you have any plans at this time to unload the 24 Trump Marina? Is that part of the plan to 25 advance the success and equity of the company 89 Lasry 1 vis-a-vis the two primary properties that 2 you're interested in preserving at the -- and 3 at the same time to sell off the Trump Marina? 4 Is that -- is that a part of your plan? 5 THE WITNESS: I think we're definitely 6 looking at doing that. I think that is 7 absolutely on the table. The question really 8 with it, the Marina needs -- how do I say this 9 nicely? You know, it needs updating. Maybe 10 that's the best way to put it. And so I think 11 to turn the Marina into what I would -- I think 12 it is in a phenomenal location, and it's great. 13 But it's a bit old, and it's a bit dated. So I 14 think to attract more people there, you need to 15 spend quite a bit of money fixing it up. 16 And I think for us, we're going to have 17 really two decisions to make is depending on 18 what people would like to pay you for it. All 19 right? We may come to the conclusion, well, 20 the value of that asset or the value of the 21 Marina we think is greater than what somebody 22 may be willing to give us, so maybe it would 23 make sense for us to end up fixing it. I think 24 that's definitely one option. 25 And then the second option would be to 90 Lasry 1 sell it, and I think to sell it where we 2 believe in what the person -- you know, we've 3 had a number of people who have come to us who 4 wanted to talk to us about it, and we've told 5 everybody, look, we'll discuss it afterwards, 6 and then we'll try to figure it out. I think 7 we think if that's going to be beneficial to 8 Atlantic City it's something we're going to 9 want to do. But a lot of it is going to depend 10 on the price. 11 COMMISSIONER SOMMELING: Okay. That's 12 all. 13 CHAIR KASSEKERT: Thank you. 14 Anything on redirect? 15 MR. CASIELLO: I have no further 16 questions. 17 CHAIR KASSEKERT: Mr. Fogarty? 18 MR. FOGARTY: The Division has none. 19 CHAIR KASSEKERT: Thank you. You may 20 step down, Mr. Lasry. 21 THE WITNESS: Thank you. 22 CHAIR KASSEKERT: Mr. Casiello, you may 23 call your next witness. If you have one. 24 MR. CASIELLO: We have no further 25 witnesses, Madame Chair. 91 ITEM NO. 20 1 CHAIR KASSEKERT: Okay. We will move 2 then to closing statements. 3 Mr. Fogarty? 4 MR. FOGARTY: My closing simply is I've 5 seen the draft resolution, and we interpose no 6 objection to its entry. 7 Thank you. 8 CHAIR KASSEKERT: That is the shortest 9 closing I've heard in my life, Mr. Fogarty. 10 (Laughter.) 11 MR. CASIELLO: Should I try to beat it? 12 CHAIR KASSEKERT: Mr. Casiello? 13 MR. CASIELLO: I'm going to be a little 14 bit longer. 15 CHAIR KASSEKERT: Very good. 16 MR. CASIELLO: I've also seen the draft 17 resolution, and it is acceptable to us both in 18 form and substance, and I would simply request 19 that you find the Avenue application complete, 20 approve the trust agreement, find Judge 21 Williams qualified to serve as trustee, and 22 issue ICA to Avenue Capital. 23 Thank you. 24 CHAIR KASSEKERT: Thank you. All right. 25 Let me just ask if any of the 92 ITEM NO. 20 1 commissioners need a break? 2 All right. We will move forward then. 3 We are here this afternoon to consider 4 the application of Avenue New Jersey 5 Entertainment for interim casino authorization 6 as a holding company of the three Trump casino 7 licensees. As we have heard, Avenue New Jersey 8 will hold over 21 percent of the shares of new 9 common stock to be issued by Trump 10 Entertainment pursuant to a reorganization plan 11 that has been confirmed by the bankruptcy 12 court. Later this afternoon, we will, of 13 course, hear Trump Entertainment's petition for 14 approval of that plan. 15 Over the course of the past many months, 16 the Applicants have filed an extensive 17 submissions with the Commission and the 18 Division in support of their application for 19 ICA. A grant of ICA would allow them to 20 acquire the interests interim prior to a final 21 ruling on their plenary qualification. During 22 interim casino authorization, the Applicants' 23 equity interests will be held in trust with the 24 Honorable Richard Williams as trustee, and he 25 is, of course, qualified as such, and we thank 93 ITEM NO. 20 1 him for his service here. 2 There are various qualification rulings 3 as to the Avenue entities and individuals and a 4 number of other technical rulings as to the 5 Applicants' organization documents, and these 6 are detailed in the draft resolution, and I 7 need not reiterate them here. I do have a few 8 comments, however. 9 We've heard testimony today from Mr. 10 Lasry about his company's interest in Trump 11 Entertainment and in Atlantic City. And at a 12 time when others believe Atlantic City's best 13 days are behind her, Avenue Capital sees 14 opportunity. It sees potential. We share the 15 vision of a healthy future for the casino 16 industry here, and we welcome you, and we have 17 great hopes for your success with Trump 18 Entertainment. 19 Based upon the entire record of this 20 proceeding, including today's testimony, I am 21 satisfied that the Applicants meet the 22 standards for interim casino authorization. 23 And, accordingly, I would move to adopt 24 the draft resolution one, find that Avenue New 25 Jersey Entertainment -- New Jersey's 94 ITEM NO. 20 1 Entertainment application for ICA is complete; 2 Two, approve the ICA trust agreement; 3 And, three, grant interim casino 4 authorization to Avenue New Jersey 5 Entertainment as a holding company of the Trump 6 casino licensees as set forth in the findings 7 and rulings and subject to the conditions in 8 the resolution. 9 COMMISSIONER EPPS: Second. 10 CHAIR KASSEKERT: I so move and 11 Commissioner Epps seconds, and this is a roll 12 call vote. 13 MR. NANCE: Commissioner Sommeling? 14 COMMISSIONER SOMMELING: Yes. 15 MR. NANCE: Commissioner Epps? 16 COMMISSIONER EPPS: Yes. 17 MR. NANCE: Commissioner Fanelle? 18 COMMISSIONER FANELLE: Yes. 19 MR. NANCE: Vice Chair Harrington? 20 VICE CHAIR HARRINGTON: Yes. 21 MR. NANCE: Chair Kassekert? 22 CHAIR KASSEKERT: Yes. 23 MR. NANCE: The record will reflect that 24 the motion is unanimous. 25 CHAIR KASSEKERT: Congratulations. 95 ITEM NO. 21 1 MR. CASIELLO: Thank you very much. 2 MR. FOGARTY: Thank you. 3 MR. NANCE: Item No. 21, amended 4 petition of Trump Entertainment Resorts for 5 approval necessary under the Casino Control Act 6 NJSA 5:12-1, et seq., to consummate a plan of 7 reorganization. 8 Miss Wozniak? 9 MS. WOZNIAK: Chair, Commissioners, I 10 would once again ask counsel to enter their 11 appearances. 12 MR. CASIELLO: Nick Casiello and Pat 13 Madamba, Fox Rothschild, on behalf of 14 Petitioners. 15 MR. FOGARTY: And James Fogarty, Deputy 16 Attorney General, on behalf of the Division of 17 Gaming Enforcement. 18 CHAIR KASSEKERT: Thank you again, 19 gentlemen. 20 The Commission this afternoon has 21 granted interim casino authorization to the 22 Avenue Capital Applicants in connection with 23 their investment in a reorganized Trump 24 Entertainment. The Trump reorganization plan 25 was confirmed by the bankruptcy court on May 7, 96 ITEM NO. 21 1 2010. The Trump licensees are now before us 2 seeking reapproval that is prerequisite to the 3 consummation of that plan. 4 The Commission will hear testimony from 5 the Petitioners this afternoon. However, we 6 first have exhibits that have been premarked. 7 Mr. Nance? 8 MR. NANCE: Chair, Commissioners, the 9 premarked exhibits are as follows: The Casino 10 Control Commission has one exhibit premarked as 11 C-1 for identification only, the draft 12 resolution. 13 The Division of Gaming Enforcement has 14 one exhibit that has been premarked as Exhibit 15 D-1. D-1 is a report dated July 1st, 2010, 16 regarding Petition No. 0341004. 17 The Petitioners have submitted 20 18 exhibits, P-1 to P-20 as listed on the exhibit 19 list. 20 CHAIR KASSEKERT: Thank you. 21 Is there any request for any redactions? 22 MR. CASIELLO: We request that the 23 Division of Gaming Enforcement report premarked 24 as D-1 be redacted, Madame Chair. 25 CHAIR KASSEKERT: Thank you. 97 ITEM NO. 21 1 Mr. Fogarty, any objection? 2 MR. FOGARTY: No. We've seen the 3 request on that. We have no objection to it. 4 CHAIR KASSEKERT: Thank you. 5 Any objections to the admission of these 6 exhibits? 7 MR. CASIELLO: No objection. 8 MR. FOGARTY: And none from the 9 Division. 10 CHAIR KASSEKERT: Very good. 11 Any comments on the draft resolution? 12 MR. CASIELLO: The form of the draft 13 resolution is acceptable to us. 14 MR. FOGARTY: The form is acceptable. 15 CHAIR KASSEKERT: Very good. 16 I would, therefore, move these into 17 evidence and onto the record. 18 And, again, are there any other 19 procedural matters that need to be brought to 20 our attention? 21 MR. CASIELLO: Nothing, Madame Chair. 22 MR. FOGARTY: Nothing, Chair. 23 CHAIR KASSEKERT: Very good. We'll now 24 move to opening statements. 25 Mr. Casiello, do you have an opening 98 ITEM NO. 21 1 statement? 2 MR. CASIELLO: In an effort to be even 3 briefer -- 4 (Laughter.) 5 MR. CASIELLO: -- I am going to waive my 6 opening statement, and I'm not going to 7 introduce anybody. 8 CHAIR KASSEKERT: Okay. Mr. Fogarty? 9 MR. FOGARTY: Sorry. 10 (Laughter.) 11 CHAIR KASSEKERT: I knew it. 12 MR. CASIELLO: You can't trust people 13 who work for the State sometimes. 14 (Laughter.) 15 MR. FOGARTY: This podium is not mine, 16 by the way. Mr. Casiello requested this 17 podium. Makes you wonder why he did, though, 18 if he's waiving statements. 19 MR. CASIELLO: I'm saving it for the 20 closing. 21 (Laughter.) 22 MR. FOGARTY: Chair, Commissioners, Mr. 23 Casiello, Mr. Madamba, Ms. Wozniak, this is the 24 third time the regulators have been asked to 25 approve for the Trump entities a plan of 99 ITEM NO. 21 1 reorganization arrived at under auspices of the 2 exclusive jurisdiction of a bankruptcy court 3 administering the bankruptcy code. The first 4 was in 1992 and the second was just five years 5 ago in 2005. 6 The Chapter 11 reorganization process 7 this time at 14 months was particularly 8 difficult and protracted and was vigorously 9 contested before the bankruptcy court chose the 10 plan that is before us now over a competing 11 plan. In fact, it is still being contested as 12 we meet here today since the losing party has 13 appealed. The bankruptcy courts planned 14 confirmation. 15 But that competing plan and that appeal 16 are of no moment to us today. Our role starts 17 with the plan that the bankruptcy court 18 confirmed, and it is only that plan upon which 19 we have focused. Our job is to apply New 20 Jersey gaming law and the Casino Control Act to 21 that plan for the primary purposes of 22 determining what individuals and entities 23 associated with the reorganized companies need 24 to be qualified or licensed under the Act and 25 to determine if, based on the financial 100 ITEM NO. 21 1 information provided by Petitioner, financial 2 stability pursuant to the Act has been 3 sufficiently demonstrated for the period of two 4 years, at which time in June of 2012 casino 5 license renewals of these Trump casino 6 licensees will be held. The Division has 7 attempted to do just that in its report to the 8 Commission dated July 1, 2010, in evidence 9 Exhibit D-1, and to give you our assessment of 10 the matters in issue. 11 While the good news is because of the 12 operation of the bankruptcy code, the Trump 13 entities debt burden will be significantly 14 reduced, and they will be in significantly 15 better financial health than they were in 16 February 2009 when they sought bankruptcy 17 protection. This is not the best of times to 18 be emerging from bankruptcy. Recovery from the 19 great recession has been spotty and slow. And 20 the aftereffects of that near meltdown remain a 21 drag on the economy. Atlantic City has not 22 been immune and has undergone and continues to 23 undergo significant declines. Attesting to 24 that are the recently announced revenue results 25 for June 2010 as compared to June 2009 which 101 ITEM NO. 21 1 are down industrywide over 11 percent. And 2 before that for the nine -- for the five-month 3 period of January 1 through May 31, 2010, down 4 nearly eight percent. And before that for the 5 2009 calendar year down over 13 percent. 6 The Trump casinos have fared slightly 7 worse, with its revenues for the first five 8 months of this year down nearly 13 percent and 9 down 14 and a half percent for calendar 2009. 10 Atlantic City's once exclusive East 11 Coast gaming franchise has been eroded over the 12 years with the proliferation of nearby 13 competition in New York, Delaware, and 14 especially Pennsylvania. And that competitive 15 pressure continues as evidenced by the table 16 games, introduction of table games in 17 Pennsylvania being introduced just last week on 18 July 8th, 2010. Some have estimated that the 19 table games in Pennsylvania will take 20 approximately $240 million a year in revenues 21 out of Atlantic City. We, frankly, are 22 somewhat concerned. 23 In our report, our assessment is that 24 the Trump entities minimally satisfy the 25 financial stability standards under the Act 102 ITEM NO. 21 1 going forward for the two years of licensure. 2 Our view is predicated on the uncertainty of 3 the economy generally and particularly on the 4 near certain impact of the table games in 5 Pennsylvania. With no identified external 6 source of funds such as a credit facility, 7 there is no certain safety net to catch the 8 Trump properties should management's hopeful 9 expectations not be realized. That is why we 10 have recommended that you impose the monthly 11 monitoring condition and also impose the 12 condition regarding the not making cash 13 distributions or dividends without your prior 14 approval as more fully set forth in our report. 15 We do not expect that what is said here 16 today will change our assessment as outlined in 17 our report and to which I have alluded to in 18 these brief opening remarks. 19 These are indeed difficult and 20 challenging times which will require prudent 21 and wise use by the Trump casino licensees and 22 their parent companies of the funds to be made 23 available from a plan of reorganization and it 24 will require continued vigilance by the 25 regulators. 103 Burke - direct - Casiello 1 Thank you. 2 CHAIR KASSEKERT: Thank you. 3 Mr. Casiello, would you like to call 4 your first witness? 5 MR. CASIELLO: John Burke, please. 6 CHAIR KASSEKERT: Afternoon, Mr. Burke. 7 Mr. Nance will swear you in. 8 MR. BURKE: Good afternoon. 9 10 JOHN BURKE, was duly sworn to testify in 11 this matter. 12 13 MR. NANCE: Would you please state your 14 name for the record? 15 THE WITNESS: John P. Burke. 16 MR. NANCE: Thank you. You may be 17 seated. 18 CHAIR KASSEKERT: You may proceed. 19 20 DIRECT EXAMINATION BY MR. CASIELLO: 21 Q. By whom are you employed, Mr. Burke, and 22 in what positions? 23 A. Trump Entertainment Resorts. I'm the 24 Chief Financial Officer, Executive Vice President, and 25 Corporate Treasurer. 104 Burke - direct - Casiello 1 Q. And how long have you been employed by 2 Trump Entertainment Resorts? 3 A. For approximately 20 years by Trump 4 Entertainment and its predecessor companies. 5 Q. Later on today Mr. Juliano will be 6 testifying about the details of the bankruptcy plan of 7 reorganization. My questions to you are going to 8 focus on the financial aspects of the plan. 9 What was the debt structure of the 10 company prior to filing the bankruptcy petition? 11 A. At the day we filed the petition, we had 12 two levels of debt. We had first lien indebtedness of 13 $484 million with Beal Bank, and we also had 14 a-billion-two-fifty of second lien notes due in 15 December 2015 carrying an interest rate of eight and a 16 half percent. 17 Q. Is Beal Bank still the lender under the 18 credit agreement? 19 A. No. They are not. During the 20 bankruptcy, Icahn Partners purchased their interests. 21 Q. Under the plan, what happens to the 22 Beal/Icahn credit agreement? 23 A. It remains in place. It becomes 24 amended. The debt level as set by the bankruptcy 25 court becomes 334 million after the application of 105 Burke - direct - Casiello 1 $125 million of the proceeds from the -- from the 2 rights offering. And the interest rate goes from 3 eight and a half percent to 12 percent. And the 4 maturity date goes to -- from December of 2012 to 5 December of 2015. 6 Q. And what happens to the senior secured 7 notes under the plan? 8 A. The senior secured notes are 9 extinguished under the plan. The holders of those 10 senior secured notes receive five percent of the 11 equity of the company. 12 Q. Thank you. 13 Were projections prepared for the 14 bankruptcy court? 15 A. Yes, they were. 16 Q. And when were they prepared? 17 A. They were prepared at the end of 20 -- 18 2009? 19 Q. And did the bankruptcy court consider 20 the financial viability of the company under the plan? 21 A. Yes, they did. They looked at the 22 projections and found them reasonable. They looked at 23 the loan and thought it was serviceable. And they 24 also said the plan was financially feasible. 25 Q. Okay. Were the projections prepared for 106 Burke - direct - Casiello 1 the bankruptcy court provided to the Commission and 2 Division? 3 A. Yes, they were. 4 Q. And why were they provided to the 5 Commission and the Division? 6 A. Well, under our licensing -- in our 7 current licensing, we were required to give mid-term 8 financials at December 31st in 2009, so they served 9 that same purpose. 10 Q. And did the company provide other 11 financial information to the Commission and Division? 12 A. Yes. We did. We provided two types of 13 information. We provided some supplemental 14 information with respect to the projections that we 15 had provided, and we've also provided a no-growth 16 scenario to the Division and the Commission. 17 Q. And what kind of supplemental 18 information did you provide to the Commission and the 19 Division? 20 A. Well, in the projections that we 21 originally provided, there were certain events that 22 were going to take place, and we updated those to 23 reflect, you know, more current information. 24 Q. And what kind of events were those? 25 A. Well, mainly it dealt with the 107 Burke - direct - Casiello 1 competition in the local areas and certainly the -- it 2 included the two casinos in Philadelphia, both 3 Foxwoods and SugarHouse. It also dealt with Revel, 4 when Revel would start. And likewise the likelihood 5 of gaming in Aqueduct in New York City, and all of 6 those projects, as you know, have been delayed. 7 Q. Is it unusual for assumptions in 8 projections to change? 9 A. Absolutely not. Projections are made at 10 a point in time with the best available information 11 that we have. And, you know, a lot of its educated 12 guesses, and sometimes you guess right. Sometimes you 13 guess wrong. But that -- certainly they change. 14 Q. Can you explain the no-growth analysis 15 that was provided to the Commission and the Division? 16 A. Yes. What we did is we took the 2010 17 budget amounts that we had provide -- originally 18 provided. We updated them to reflect the 19 first-quarter results which we all remember was, you 20 know, pretty difficult because of the hash winter that 21 we had. And we used that as a base level of revenue 22 for the year 2010. And then we made the assumption 23 that those revenues would not change for 2011 and 24 2012. We also looked at the expenditure levels and 25 thought in a no-growth scenario that we could 108 Burke - direct - Casiello 1 certainly make some modifications and reductions both 2 in the corporate overhead and likewise in the shared 3 expenses. So we did that, also. He also looked at 4 the capital expenditure levels, and we modified those 5 also to reflect the maintenance cappex as opposed to 6 any project cappex. 7 Q. Thank you. 8 If the company does not achieve the 9 results contained in projections, will it have the 10 flexibility to absorb additional decreases in revenue? 11 A. I believe they will. And I think 12 there's a number of reasons why I believe that. The 13 primary one is the excess cash or cash cushion that we 14 received from the rights offering. And also some of 15 the things that we've looked at include, you know, in 16 our forecast that there is a provision for an 17 alternate minimal of tax payment. There's also 18 consideration for the -- not in our plan, but we also 19 considered the sale of the Trump Marina. There are 20 also is a recharacterization motion that's before the 21 bankruptcy court. We also believe, again, if things 22 get worse that we could further cut so further look at 23 the operating expenses both on the -- at all levels 24 we'd take further look at that. And also, again, 25 given favorable markets and a receptive board and, 109 Burke - direct - Casiello 1 obviously, a receptive capital market, we'd like to 2 see if we could access capital markets. Probably not 3 now but certainly hopefully within the two years of 4 the licensing period. 5 Q. Okay. I want to go through each one of 6 those. Let's start with the alternative minimum tax 7 payment. Is that currently in your -- you're 8 paying -- paying that tax currently in your 9 projections? 10 A. Yes. We had projected that woudl be 11 paid in 2010. The likelihodd of that happening -- 12 it's highly unlikely. You know, we previously had 13 challenged that assessment. We have to yet -- and 14 that challenge is still in existence. And the amount 15 of time it will take to challenge, you know, to 16 resolve that probably, in all likelihood, would take 17 us into 2011. 18 Also, as far as the statutorily, we have 19 the opportunity to look for deferred payments on that. 20 I think we can pay it -- I think up to six years. So 21 that would certainly provide additional cash. 22 Q. So the likelihood is that the company 23 will not have to make that payment this year unless it 24 chooses to? 25 A. I believe that's correct. 110 Burke - direct - Casiello 1 Q. Okay. The next item you mentioned is a 2 sale of Trump Marina. What impact would that have on 3 the projections? 4 A. Well, certainly a sale -- any of the net 5 proceeds that would come from the sale of Trump Marina 6 would provide reduction because it would go directly 7 to reduce the first lien indebtedness which would 8 provide a reduction in our interest expense. And to 9 the extent our properties required cash, we'd have -- 10 save the cash that we would have to have gone into 11 that property, so. 12 Q. Thank you. 13 Can you explain the recharacterization 14 motion? 15 A. Yes. Under the bankruptcy rules, we're 16 allowed to look at the payment that we have made to 17 Beal Bank and to Beal Bank's professionals, and /Icahn 18 professionals over the period of the bankruptcy, which 19 is 60 -- over $60 million. The bankruptcy court can 20 take a look at those payments and reflect upon them 21 and say that they are really shouldn't be -- looked at 22 as interest payments but as principal payments. And 23 to the extent that they go against the loan, then 24 the -- then our interest rate, our interest carry 25 would go down. 111 Burke - direct - Casiello 1 Q. And your projections don't include 2 anything for that occurring? 3 A. No, it does not. 4 Q. And the same is true with respect to 5 Trump Marina sale; correct? 6 A. That's correct. 7 Q. How would you reduce overhead? 8 A. Well, I again -- you know, again, if 9 we're talking about a no-growth or even a further 10 lessening of the current operating levels, we have to 11 look at, you know, some serious steps. And I defer to 12 Mark on a lot of the operating levels. But, you know, 13 you get to the point where you have to close 14 restaurants, you have to look at maybe several areas 15 of the -- these are really draconian measures that I 16 don't think we would have to do. But certainly there 17 are steps that you can take to adjust your expense 18 levels to meet what would be the current challenges. 19 Q. Okay. Lastly, you mentioned accessing 20 the capital markets. Can you explain that as well? 21 A. Well, I'm just saying with a new board 22 and with an outlook to growing the company, I believe 23 that they, you know, hopefully would be receptive. 24 And, obviously, it depends upon the markets themselves 25 and the costs involved. But ideally we would like to 112 Burke - direct - Casiello 1 see hopefully within the short term that we'd be able 2 to take out the current first lien indebtedness at an 3 interest rate that's lower than the current 12 4 percent. And, likewise, if, you know, the equity, 5 which people can get excited as we get other people 6 excited as capitalists in this company then we could 7 have access to the capital market to the common equity 8 also. 9 Q. Thank you. 10 Does the company have any additional 11 borrowing capacity? 12 A. Yes, we do. Under the credit agreement, 13 we can borrow up to $20 million for fixed-asset 14 financing for each of the three properties. 15 Q. Could you explain fixed-asset financing 16 please? 17 A. Well, basically it's where you are 18 buying -- let's use slot machines. You're buying slot 19 machines, and you borrow the money to pay for those 20 slot machines. It becomes -- it's something that, you 21 know not -- you, know it's doable certainly in 22 experience because here the lender gets a priority 23 lien on those assets. And, again, God forbid it's the 24 worse situation, they can come in and take their 25 property back if it doesn't work out. So it's 113 Burke - cross - Fogarty 1 something that's a little more easy to do than 2 unsecured financing. 3 Q. Thank you. 4 Do you believe that the company will be 5 financial stable if this plan is approved by the 6 Commission? 7 A. Oh, yes. I do. I mean, the debt, as we 8 know, is going down from -- the billion-two-fifty is 9 going away. The 484 is going down to 334. Our 10 interest expense goes down from 136 million down to 40 11 million. We -- you know, we -- and most of all is the 12 excess cash and cushion that the rights offering 13 provides us. 14 Q. Thank you. 15 MR. CASIELLO: I have no further 16 questions. 17 CHAIR KASSEKERT: Thank you. 18 Cross-examination, Mr. Fogarty? 19 MR. FOGARTY: Yes, please. 20 21 CROSS-EXAMINATION BY MR. FOGARTY: 22 Q. How much is that cash cushion, sir? 23 A. Probably 50 to $60 million. 24 Q. Do you recall, sir, that you, the 25 company, projected that revenues for forecasted for 114 Burke - cross - Fogarty 1 2010 for the three properties would be some $786 2 million? 3 A. I believe that's correct. 4 Q. I -- that's not necessarily a quiz. I 5 can get you the book. 6 A. Oh, no. I believe you. I trust you on 7 your numbers. 8 Q. Okay. And that you forecasted if for 9 2011 that the consolidated net revenues would be some 10 $876 million. 11 A. That's correct. 12 Q. That's a $90 million difference in a 13 year in revenues? 14 A. That's correct. 15 Q. Reasonable that the companies can 16 achieve that? 17 A. Well I think -- well, I think given what 18 we've heard about the economy and how things have not 19 turned out the way we've expected, certainly in 2010 20 and the outlook for recovery has sort of been pushed 21 out, it's probably unlikely that those numbers can be 22 achieved at this point. 23 Q. And those numbers were also predicated 24 without regard to the introduction of Pennsylvania 25 table games; am I correct? 115 Burke - cross - Fogarty 1 A. That's correct, but we -- 2 Q. So not only do you have to make up this 3 90 million in a -- in an economy that's uncertain -- 4 for want of a better word -- but you also have to do 5 it in the face of increased competition from 6 Pennsylvania table games? 7 A. Again, what I would point out is -- 8 again, in those forecasts that we talked about in -- 9 that you just mentioned, they included certain 10 assumptions with respect to the Aqueduct, Revel, 11 SugarHouse and Foxwoods. In the supplemental 12 information I provided, one could see that those -- 13 with those numbers -- with those -- with that 14 competition not coming into play, that provides us an 15 opportunity, perhaps, to gain some ground. And we 16 believe on the -- on the table game side, we don't 17 feel, at least as a company at this point, that it's 18 going to be as dramatic an effect on the company as 19 slots was. Certainly, as you know, table games are 20 not only -- but there are about 35 percent of our -- 21 of our gaming revenue and 65 percent -- 65 percent 22 being slots. Table games are a lower margin business. 23 The -- and we believe the table game customer is a 24 little different. Is not as convenience oriented as 25 the slot player. So we believe the three properties 116 Burke - cross - Fogarty 1 that we have will continue to attract that table game 2 play. So we believe at the end of the day that it's 3 not going to be as effective. But, you know, nobody 4 can predict a hundred percent. 5 Q. You heard in my opening, I believe, sir, 6 that some think that the Pennsylvania table games 7 could take $240 million out of the Atlantic City 8 market on a yearly basis. My question is do you 9 recall me saying that? 10 A. I recall you saying that, certainly. 11 Q. How much did the company predict that it 12 would lose to Pennsylvania table games in those 13 supplemental schedules you gave us? 14 A. Well, what we did in supplemental 15 schedules -- and, again, we don't look at just 16 revenues. We look at the net operating cash flow wise 17 because, again, we say with table games being at the 18 lower margin business, you have -- we have 19 opportunities. Again, if we're wrong on the effect, 20 we have opportunities to reduce those costs. Because, 21 again, you have a lot of -- you have different costs 22 there that you can more readily reduce than you could, 23 let's say, on the slot side. So and again -- 24 Q. I recall there was some -- 25 A. Again, looking at it on a net level, we 117 Burke - cross - Fogarty 1 compared the effects of the different competition that 2 we had in the regional forecast, that would be 3 Aqueduct, Revel, and the two Philadelphia casinos, and 4 compared that through a range of numbers with respect 5 to the effects of games. And we felt the two really 6 much offset each other. So we, therefore, still 7 thought we were in a reasonable range. And, again, 8 the cash cushion is ultimately where we come back to 9 as saying that cash cushion coming from the rights 10 offering provides us our safety net. 11 Q. I recall you saying that there was 12 approximately in effect of about $5.7 million a year 13 that you all would be affected by the introduction of 14 table games in Pennsylvania. Does that sound correct? 15 A. That sounds correct. 16 Q. Just 5.7 million a year? 17 A. Again, is it -- it could be higher. It 18 could be lower. You know, we have to see how they 19 come out. Again, I think our sincere belief is that 20 it's not going to be as dramatic as the slot play. 21 Because, again, the convenience player, slot player is 22 more than -- counts for a lot more dollars. The high 23 end, especially the high-end player, the player we're 24 trying to attract at the Taj, you know, wants that -- 25 wants the suite, wants the food product, wants the 118 Burke - cross - Fogarty 1 entertainment, wants all the amenities that we can 2 provide at our properties that they want, we believe 3 they can't receive at the Pennsylvania properties. 4 Q. For the first six months of this year, 5 we estimate the Trump properties are down $50 million 6 over the same six-month period in the year before. Is 7 that about right? 8 A. That sounds about right. 9 Q. So already in 2010, you're $50 million 10 off the mark. 11 A. Right. And I again point back to the 12 winter of 2010. So the first quarter -- and I think 13 the first quarter, when we looked at our analysis of, 14 you know, where we missed in the first quarter, it -- 15 I would say 95 percent of it was attributable to the 16 weather. So and then I think the second half, to the 17 extent that the misses continues, I think it's the 18 fact that the economy is not recovering the way we 19 thought. We kind of all felt good in April. Now all 20 of a sudden, people aren't feeling so good in May and 21 June anymore. But obviously both are passed. But 22 neither one, the economy seems to have -- I mean, 23 hopefully it's bottomed and it's not going to go 24 lower. But certainly is not showing any vigor or 25 robustness at this point. 119 Burke - cross - Fogarty 1 Q. So the $90 million we chatted about 2 earlier, we have to add this $50 million that you are 3 already behind the eight ball. 4 A. Well, you're talking about revenue. I 5 think the more important issue to look at is cash 6 flow. 7 Q. We did look at revenue, the 90 plus 50? 8 A. Yeah. Revenue, 90 plus 50. But, again, 9 this is where we have the opportunity with respect to 10 the expense side, if the revenue levels, you know, 11 continue to -- continue to decline, then I think we 12 have -- then we have some issues with making -- making 13 more draconian cuts and maybe looking harder and look 14 at our expenses. I mean, doesn't make a month. But 15 I'm happy to report for the first, you know, 13 days 16 of July, we're ahead of forecast and we're ahead of 17 last year. So that's a positive step. So hopefully, 18 you know, that's a sign. 19 Q. Congratulations. 20 (Laughter.) 21 A. We've turned a corner. 22 Q. Does -- is there any external source of 23 funds such as a credit facility available to your 24 company for the next two years? 25 A. Well, like I said, under the -- under 120 Burke - cross - Fogarty 1 the amended and restated -- under the credit 2 agreement, we have the opportunity to borrow for fixed 3 assets, which could be a significant portion of our -- 4 you know, you want to replace the slot parlor, we can 5 use -- 6 Q. That's the capital lease you're talking 7 about? 8 A. Capital lease or deferred payment 9 purchase, however you want to call it. But we have 10 the opportunity under -- to borrow up to $20 million 11 per property, so that's a total of $60 million. 12 Actually, under the agreement, there's also another 13 $15 million, I believe, for unsecured financing. But 14 that probably would a little difficult to get at this 15 point. But certainly the fixed-asset financing, I 16 don't believe it would be a challenge at all. 17 Q. And so I guess your answer to my 18 question is that 60 million -- up to 60 million. 19 A. That's correct. 20 Q. Why would the 15, the other unsecured 21 15, be tough to get? 22 A. Well, because I think you just stated it 23 very well. You stated the state of the economy. You 24 stated the state of the revenues in Atlantic City. I 25 think those things -- those items would be a little 121 Burke - cross - Fogarty 1 more challenging. 2 Q. Now, does the amended and restated 3 credit agreement allow cash dividends and 4 distributions to stockholders? 5 A. No, it does not. 6 Q. That's all I have, sir. Thank you. 7 CHAIR KASSEKERT: Thank you. 8 Questions from commissioners? 9 Commissioner Epps? 10 COMMISSIONER EPPS: When we spoke about 11 if you get to the point where you need 12 flexibility, you spoke to the cash cushion from 13 the rights offering and some of the other 14 processes, but the last thing you spoke to was 15 accessing the capital markets. Would that be a 16 last resort? Or do you think that if you 17 turned it around that you would have to access 18 the cash markets so you better -- you kind of 19 get rid of one deal for a better deal. Not -- 20 so, I guess the question I'm getting to is 21 you're not talking about adding leverage. 22 You're talking about restructuring your 23 financing. 24 THE WITNESS: Exactly. I'd like to say 25 almost our first choice if -- if it were 122 Burke 1 available. Certainly if we could reduce our -- 2 you know, reduce our leverage or provide 3 additional equity, that's clearly better than 4 borrowing and, you know, selling things that we 5 don't necessarily want to sell. 6 COMMISSIONER EPPS: That was ultimately 7 the question. We're talking about accessing 8 the capital markets. We're not just talking 9 about further levering the company. We're just 10 talking about restructuring your finances for a 11 better situation. 12 THE WITNESS: That's correct. 13 COMMISSIONER EPPS: Okay. That was my 14 question. 15 Now, but if you're in a situation where 16 you need flexibility, and you've incurred a 17 shortfall, that's not likely to be available to 18 you. Is that accurate? 19 THE WITNESS: That's probably accurate. 20 Again, it's all going to depend what the 21 overall markets are, what the perception of 22 Atlantic City is. And hopefully we get to turn 23 that around with our, you know, newly 24 reconfigured company. You know, it's -- we 25 have to see what's going to happen. 123 Burke - redirect - Casiello 1 COMMISSIONER EPPS: Okay. That was all 2 I had. 3 CHAIR KASSEKERT: Commissioner 4 Sommeling? 5 COMMISSIONER SOMMELING: No questions, 6 Madame Chair. 7 CHAIR KASSEKERT: Commissioners? 8 Anything on redirect? 9 MR. CASIELLO: Just one thing, Madame 10 Chair. 11 CHAIR KASSEKERT: Sure. 12 13 REDIRECT EXAMINATION BY MR. CASIELLO: 14 Q. John, General Fogarty asked you 15 questions about the downturn in your revenues for the 16 first six months or so after this year. What were 17 revenues like in Atlantic City industrywide? Was 18 there a similar turn in the entire industry? 19 A. Exactly. You know, as he characterized, 20 we were maybe slightly below the six-month period, but 21 generally we were in line with the industry. 22 MR. CASIELLO: No further questions. 23 CHAIR KASSEKERT: Mr. Fogarty? 24 MR. FOGARTY: Nothing further from me. 25 CHAIR KASSEKERT: Thank you. You may 124 Juliano - direct - Casiello 1 step down. 2 Mr. Casiello, you may call your next 3 witness. 4 MR. CASIELLO: Mark Juliano, please. 5 CHAIR KASSEKERT: Mr. Juliano, Mr. Nance 6 will swear you in. 7 8 MARK JULIANO, was duly sworn to testify 9 in this matter. 10 11 MR. NANCE: Please state your name for 12 the record. 13 THE WITNESS: Mark Juliano. 14 MR. NANCE: Thank you. 15 MR. CASIELLO: He's done this so many 16 times, he still has to get sworn in? 17 CHAIR KASSEKERT: Yes. We want to check 18 every time that he's telling the truth. 19 THE WITNESS: Never be sure. 20 MR. CASIELLO: We're going to go through 21 his employment history, which I'm sure you've 22 never heard before. 23 24 DIRECT EXAMINATION BY MR. CASIELLO: 25 Q. By whom are you employed and in what 125 Juliano - direct - Casiello 1 position? 2 A. I'm employed by Trump Entertainment, and 3 I am Chief Executive Officer. 4 Q. How long have you been employed by Trump 5 Entertainment? 6 A. I have been employed since July of 2005, 7 first as the Chief Operating Officer. 8 Q. Briefly review your employment history 9 in the casino industry. 10 A. I started my employment here in Atlantic 11 City in 1978 as a seating captain in the showroom at 12 Resorts. And I spent a few years there and moved into 13 the marketing department as a customer development 14 executive. And in 1986 I left Resorts to work at 15 Caesars in that same position. And over the course of 16 a few years, eventually was the Vice President of 17 Marketing there. And then in 1990, I moved to Las 18 Vegas as the president of the Caesars -- of Caesars 19 World Marketing Corporation, which was a wholly-owned 20 subsidiary that marketed the three Caesars properties 21 at the time in Las Vegas, Lake Tahoe, and here in 22 Atlantic City. 23 In 1993 I came back to Atlantic City as 24 the Executive Vice President of Operations for Caesars 25 Atlantic City and stayed there until 1999. And I left 126 Juliano - direct - Casiello 1 in 1999 to work for Mirage Corporation, which at the 2 time was developing the second hotel which you will 3 fondly recall of as Le Jardin, which was not built 4 since the Mirage Corporation at the time sold to MGM 5 and cancelled that project. 6 I then continued to -- and I continued 7 to work in that capacity until the project was 8 cancelled and in 2003 went back to Caesars Palace as 9 the President and Chief Operating Officer there until 10 I returned to Atlantic City in 2005. 11 Q. Thank you. 12 Do you now or have you held any 13 positions with charitable, nonprofit, or government 14 boards? 15 A. Yes. In my tenure here in Atlantic 16 City, I have served on the board of the CRDA. I have 17 been the Chairman of the Atlantic City Convention and 18 Visitors Authority, and I am now presently also the 19 Vice Chairman of the Convention and Visitors 20 Authority. I serve on the board of AtlantiCare and on 21 the foundation board of Stockton College. I also have 22 been just newly elected as the President of the Casino 23 Association of New Jersey. 24 Q. Congratulations. 25 I want to review briefly the bankruptcy 127 Juliano - direct - Casiello 1 process, and it's been a long haul, 18 months. When 2 did the company first file for bankruptcy? 3 A. The company filed in February of 2009. 4 Q. And what was the first major step in the 5 bankruptcy process? 6 A. Well, the bankruptcy process kind of 7 took a life of its own on as it was presented with two 8 competing plans, a plan that the company eventually 9 embraced, including the ad hoc committee plan, and one 10 that was proposed by Beal Bank at the time, later the 11 Icahn/Beal plan. As those plans continued to refine 12 themselves, we found ourselves in bankruptcy court 13 sometime in April, I believe, asking Judge Wizmur to 14 confirm one of the two competing plans. And after a 15 ten-day hearing and then a 30-day or 30 -- 45-day 16 period of consideration, she did confirm the plan that 17 you are looking at today. You are considering today. 18 Q. Thank you. 19 I'm going to ask you to briefly explain 20 the plan of reorganization. First of all, what 21 happens with the Icahn/Beal credit agreement? 22 A. Well, the Beal/Icahn credit agreement 23 will stay in place with the modifications that John 24 described to you, which is a reduction in principal 25 amounts to 334 and increased in the rate to 12 percent 128 Juliano - direct - Casiello 1 and an extension of the maturity out to 2015. 2 Q. And John also touched on this, but what 3 happened to the senior secured notes? 4 A. The senior secured notes were cancelled. 5 Q. And what is the rights offering? 6 A. The rights offering is the participation 7 offering to holders of the first lien notes that will 8 participate in this new structure, and it will bring 9 $225 million of fresh capital into the company. And 10 as John described, 125 million of that will be used to 11 reduce the debt to the present level of 334 million. 12 Q. And what will the remainder of the $225 13 million be used for? 14 A. Well, the hundred million will stay 15 within the company. Some of it will be used to pay 16 administrative expenses related to the bankruptcy. 17 The other will be for the cash cushion that John has 18 talked about. Some of it will, after appropriate 19 approvals and consideration, be used for some cappex 20 needs. 21 Q. And what happens -- 22 A. General corporate purposes. 23 Q. Thank you. 24 What happens to the existing equity or 25 common stock? 129 Juliano - direct - Casiello 1 A. It is cancelled. 2 Q. Cancelled. Who will the new owners of 3 the company be? 4 A. Well, the new owners of the company will 5 be the ad hoc committee and people who are 6 participating in the rights offering led by Avenue 7 Capital, which I believe we have stated before will 8 have a 21 and a half to 22 percent stake. 9 Q. And the other note holders are seeking 10 waivers to that? 11 A. Yes, they are. 12 Q. Will Mr. Trump be receiving any equity 13 in the company? 14 A. He will be receiving five percent and 15 warrants or the ability to buy another five percent if 16 at certain conditions would warrant him to do that. 17 Q. Will the company remain publicly traded? 18 A. Yes, it will. 19 Q. And have you been paying your vendors 20 since the bankruptcy petition was filed? 21 A. We have. We have. 22 Q. And what happens to the existing 23 officers of Trump Entertainment? 24 A. The existing -- 25 Q. Officers. 130 Juliano - direct - Casiello 1 A. The existing officers of the Trump 2 Entrainment will remain in place. 3 Q. And Mr. Lasry testified about the board, 4 but I'd like to do so as well. What happens to the 5 board? 6 A. Well, the existing board, of course, is 7 going to be disbanded, and the new board would be 8 reconstituted by the gentlemen that you see here 9 tonight -- today and were introduced to you. Also 10 including myself. 11 Q. And are any approvals necessary to 12 consummate the plan of reorganization? 13 A. Well, the approval that we're seeking 14 today. 15 Q. Other than that? 16 A. No. 17 Q. And if you receive Commission approval 18 today, when do you plan on closing the transaction? 19 A. We think that it will be within the next 20 few days. 21 Q. There are several appeals or lawsuits 22 that have been filed and are pending by Icahn or Beal 23 regarding the bankruptcy court decision -- 24 A. Uh-hum. 25 Q. -- related matters. They are summarized 131 Juliano - direct - Casiello 1 in the Division of Gaming Enforcement report. Have 2 there been any major changes in the status of those 3 matters since the Division's report has been filed? 4 A. No, there hasn't. 5 Q. Does any of that litigation prevent the 6 company from closing? 7 A. No, it does not. 8 Q. Do you believe that the company will be 9 financially stable if this plan is approved? 10 A. I do. For all of the reasons that John 11 walked us through and Mr. Lasry walk us through 12 earlier, I do. 13 Q. What is your view of the future of the 14 company if the Commission approves this plan? 15 A. Well, I mean, that's a -- that's a broad 16 question that I think I'd like to answer in a way 17 that, you know, I have a certain view of what I think 18 the future of Atlantic City is. And I certainly think 19 that Trump Entertainment and the Trump brand has been 20 a part of the history of Atlantic City for a very long 21 time. And we intend to be a part of the history of 22 Atlantic City moving forward for a very long time. I 23 think that, you know, this is a difficult cycle that 24 we were -- we are in. But it does represent an 25 opportunity for the city and for the industry and for 132 Juliano - direct - Casiello 1 this company to do something that we probably should 2 have been doing all along. However, the luxury of 3 having monopoly on gaming really made it quite easy 4 for us to continue to focus just on gaming. And we 5 are now in a position where we are going to be 6 required to really examine every aspect of our 7 business. Gaming being always probably the most 8 important aspect. But creating that whole idea of an 9 entertainment experience and trying to make Atlantic 10 City a resort destination that caters not only the 11 gaming customer but to the customer that wants to see 12 a show and wants to eat in a fine restaurant, and 13 really to make it a great regional destination for 14 conventions. 15 I think that sometimes these difficult 16 times and adversity make the best opportunity for 17 companies and for industries and for a city like 18 Atlantic City to finally reach the next level that we 19 need to. I think that you all in this room have seen 20 an unparalleled level of cooperation with all of the 21 agencies that we inner -- that we work with, the CRDA, 22 Convention Center, or the Chamber of Commerce, to all 23 the regulators that cooperate to make sure that we get 24 to, you know, where we need to be. We've been here 25 for -- some of the us -- 32, 33 years, and we're not 133 Juliano - direct - Casiello 1 about to let it fail. 2 Q. Is the company well poised to take 3 advantage of the switching from the gaming destination 4 only to the overall -- 5 A. Obviously, the flagship of the company 6 is the Taj Mahal. And that is where we have focused 7 the real effort in both capital and in making sure 8 that we are able to participate in this 9 transformation. We are now up to a 2,000 room 10 inventory which now really gives us the ability to 11 compete for any kind of convention that would come 12 into town. 13 One of the bright spots that we have 14 seen in the past year or two is an ability to really 15 reach out to a retail customer, and so the cash-paying 16 portion of our business is up over prior years. So we 17 are poised to take advantage of all of the different 18 Avenues of business that are going to be coming into 19 the city. 20 Q. Commissioner Epps touched upon the 21 location of some of your properties. 22 A. Uh-hum. 23 Q. Do your properties have something -- are 24 they good locations? 25 A. Well, I mean, if you think about it, 134 Juliano - direct - Casiello 1 there are three very district locations. Trump Plaza 2 at center boardwalk is arguably the best location in 3 town. Access from the Expressway, not having to make 4 any left-hand turns, just that perfect right into our 5 garage. So -- and really what is happening at center 6 boardwalk with not only the Pier but with our own 7 Beach Bar and with the third addition of Cordish and 8 the retail expansion there, I think center boardwalk 9 becomes more and more important and more and more 10 lucrative to the companies that operate there. 11 The Plaza, as you alluded earlier, has 12 plenty of real estate to get the room count up to 13 where it needs to be. Whether we do that ourselves or 14 whether we look for a partner or whether we take up a 15 variety of opportunities available to us, that remains 16 to be seen. But, you know, the location, will always 17 be perfect. And we're very confident that the new 18 owners can be much more successful with our one hold 19 out on that block, Miss Coking. So we'll -- we will 20 have really great real estate assemblers there. 21 And so, of course, the Taj at the 22 southern end -- the northern end of the boardwalk, 23 rather -- will be, as we had mentioned earlier, a 24 catalyst for what's going on down there. 25 There are many people who are afraid or 135 Juliano - direct - Casiello 1 apprehensive about Revel adding all that new inventory 2 into town, but although we think it will have an 3 short-term negative impact on the results of the Taj, 4 it certainly will make that end of town a real 5 synergistic center now, that we think that it will be 6 certainly the advantageous to us just as the Borgata 7 was to town those years ago. 8 And then the Marina has the unique 9 ability of being the only property with a marina 10 location right on the water. And there are, as we had 11 said earlier, a lot of people with great ideas to turn 12 that into something that really is going to be 13 fantastic. 14 Q. Let's touch upon the Marina for a 15 second. And without asking to you disclose anything 16 that's confidential -- 17 A. Uh-huh. 18 Q. -- and recognizing the company hopefully 19 will be undergoing a change in ownership and control, 20 you have not been able to, you know, discuss the 21 plans -- 22 A. Right. 23 Q. -- for the property with the proposed 24 new directors. What's going on? 25 A. Well, you know, we have mentioned in all 136 Juliano - cross - Fogarty 1 of our disclosure statements and during the bankruptcy 2 hearing and in the solicitation that we had done, that 3 the Marina is one of the three properties that we 4 would most likely be interested in selling. And we 5 are entertaining a variety of offers now that we will 6 be presenting to the board shortly. And being 7 careful, of course, to maximize the value out of it 8 and making sure that it is the right thing to do 9 rather than to reinvest some of our own capital into 10 it, we think that even in the best of times the 11 ability to concentrate on two Trump properties in 12 Atlantic City is probably a better thing for us. 13 Q. Thank you, Mark. 14 MR. CASIELLO: I have no further 15 questions. 16 CHAIR KASSEKERT: Thank you. 17 Cross-examination, Mr. Fogarty? 18 MR. FOGARTY: Just one. 19 20 CROSS-EXAMINATION BY MR. FOGARTY: 21 Q. Is there litigation lodged in the 22 bankruptcy court with regard to Beal's and Coastal? 23 A. I do not believe it resides in the 24 bankruptcy court but in Florida. And it is re -- it 25 is around a casino development that we are objecting 137 Juliano - cross - Fogarty 1 to. We expect that to be heard sometime before the 2 end of this year, but it has no involvement in the 3 bankruptcy process. 4 Q. There's no action in the bankruptcy 5 court, adversary complaint filed with regard to -- 6 A. There's an adversary complaint filed in 7 that, but it will not -- it does not have an impact on 8 the proceedings today or on our emergence from 9 bankruptcy. 10 Q. So there is a matter before the 11 bankruptcy court in Camden with regard to Field, but 12 it's not going to -- you're testifying it's not going 13 to impact the effective date of your plan should this 14 Commission agree -- 15 A. That's correct. 16 Q. -- to approve. Okay. 17 Can you just very briefly tell us what 18 the substance of that adversary complaint is? 19 MR. CASIELLO: Madame Chair, I have Mr. 20 Kris Hansen from the law firm of Strook, Strook 21 & Lavan who is intimately familiar with all the 22 litigation. If you'd like to hear from him 23 directly. 24 MR. FOGARTY: Does Mr. Juliano know or 25 no? 138 Juliano - cross - Fogarty 1 MR. CASIELLO: Ask him the question. 2 MR. FOGARTY: I did. 3 A. Would you ask me again? 4 Q. Can you tell us just briefly, sir, what 5 the nature of that matter is. 6 A. The nature is a dispute over a casino 7 development that took place in Florida that the 8 company feels we should have -- that while working for 9 us, Mr. Field solicited that development, and we don't 10 think that that is appropriate. 11 Q. Apparently. That's all I was looking 12 for. 13 A. Thank you. 14 Q. Just some sense. And am I fair in 15 assuming that matter is pending there before the 16 bankruptcy court? 17 A. It is. Pending to be heard before the 18 end of the year. 19 Q. Okay. Thank you. 20 CHAIR KASSEKERT: You finished, Mr. 21 Fogarty? 22 MR. FOGARTY: Yes. 23 CHAIR KASSEKERT: I'm sorry. 24 Questions from the Commissioners? 25 MR. CASIELLO: I'm not. 139 Juliano 1 CHAIR KASSEKERT: I -- 2 MR. CASIELLO: I said I'm not. 3 CHAIR KASSEKERT: You're not finished? 4 Okay. 5 MR. CASIELLO: No. I'm not sorry that 6 he's finished. 7 (Laughter.) 8 THE WITNESS: Either am I. 9 CHAIR KASSEKERT: You're making me hold 10 my breath a little bit, Mr. Casiello. I'm a 11 little nervous up here. 12 Questions from commissioners? 13 COMMISSIONER SOMMELING: I have no 14 questions, Madame Chair. 15 COMMISSIONER EPPS: Just -- oh, go 16 ahead. 17 VICE CHAIR HARRINGTON: Well, mine is 18 more of a just not specifically about the Trump 19 properties, although they're key. 20 THE WITNESS: Uh-hum. 21 VICE CHAIR HARRINGTON: But do you 22 foresee in this environment taking the 23 leadership role in some of the cooperative 24 marketing to make sure that we do move forward 25 and advance Atlantic City as a destination and 140 Juliano 1 to really -- 2 THE WITNESS: One of the big issues that 3 we have, really, is that if you look at the 4 Atlantic City convention and visitors 5 authorities budget, we spent $16 million a year 6 on a general media campaign which is woefully 7 inadequate. So we are actively looking at ways 8 to redirect some of the funds that come into 9 the city through the industry and through a 10 variety of other ways that we do it to really 11 get that budget up to where it needs to be. 12 Perhaps maybe the $30 million that we subsidize 13 the horseracing industry could be part of that 14 marketing budget. But there are -- there are a 15 lot of ways to really talk about promoting the 16 city and to make people feel really good about 17 what is going on down here. 18 And I think one of the biggest crimes is 19 that, you know, there -- when you are here and 20 you look to see how much there is to do here, 21 it's really more of a message of getting people 22 to understand that. And to see that, you know, 23 it's great to go to a racetrack in Pennsylvania 24 and play slots for three or four hours. But 25 what we have to offer here is so much better 141 Juliano 1 than that. And we just really need to do a 2 better job of telling people about that. 3 VICE CHAIR HARRINGTON: Okay. 4 THE WITNESS: And one of the ways to do 5 it is through the Convention Authority. 6 VICE CHAIR HARRINGTON: Thank you. 7 Yeah. I share your optimism and enthusiasm. 8 And, you know, as we read about the 9 cooperation -- 10 THE WITNESS: Uh-huh. 11 VICE CHAIR HARRINGTON: -- you know, the 12 new, the leadership in the industry in Atlantic 13 City. I'm very -- 14 THE WITNESS: It's too important to too 15 many of us -- 16 VICE CHAIR HARRINGTON: -- gratified. 17 THE WITNESS: -- to let it fail. And, 18 you know, the town has been around for a long 19 time. And it manages to reinvent itself every 20 time it needs to. And I'm confident that we 21 can do it again. 22 VICE CHAIR HARRINGTON: Thank you. 23 THE WITNESS: Places won't be built like 24 this in these other jurisdictions that are 25 competing with us. And when you go to them, 142 Juliano 1 and then you come here, you realize that, you 2 know, the Act when written really was written 3 properly to encourage a lot more than just 4 building casinos. So the requirements that we 5 have, I think, are what's going to pull us 6 through this. 7 VICE CHAIR HARRINGTON: Okay. Thanks. 8 CHAIR KASSEKERT: I agree. 9 Commissioner Epps? 10 COMMISSIONER EPPS: I just have to go 11 back to the Plaza for a second. You talked 12 about Taj and Taj has the room -- the rooms. 13 THE WITNESS: Uh-hum. 14 COMMISSIONER EPPS: You just added the 15 Chairman's tower. The Taj has the Etess Arena. 16 The Taj has the restaurants, has the retail. 17 So Taj has positioned itself in this new push 18 toward nongaming amenities and the new 19 iteration of Atlantic City. How do you get the 20 Plaza -- other than the Beach Bar, how do you 21 get the Plaza to where it needs to be to 22 position itself in that new -- in that new push 23 for nongaming amenities and attractions to make 24 it a place that people want to go and a place 25 that -- where they want to be other than to 143 Juliano 1 play? 2 THE WITNESS: Right. Well, I mean, I 3 think -- I mean, I think it really is taking 4 the overall master plan that we have for the 5 Taj and scaling it down to fit the needs of the 6 Plaza, and it really comes down to capital. 7 And we really have to, you know, absorb this 8 transaction first, take a look at what the 9 market is doing over the next couple of months, 10 and then decide how to fix the Plaza. 11 I think if you go back in history, the 12 Plaza was built as a partnership with Harrah's, 13 and it was built in time when everyone was so 14 desperate to get their buildings open as 15 quickly as possible that the land assemblage 16 that was available to them required them to 17 make a tall, narrow building with the casino 18 being pretty far removed from the boardwalk. 19 So one of the problems is that you don't get 20 that foot traffic that the other casinos along 21 the boardwalk do. So it is an overall master 22 plan that has to be developed that would bring 23 the casino down a little closer to the 24 boardwalk and then have your retail and your 25 food and your entertainment outlets ring the 144 Juliano 1 casino, which, you know, is more in keeping 2 with what we have done at the Taj and in what 3 we were able to do at the Plaza because of the 4 footprint. 5 COMMISSIONER EPPS: Okay. Thank you. 6 CHAIR KASSEKERT: Commissioner 7 Sommeling? Any questions? 8 COMMISSIONER SOMMELING: You know, I'm 9 just thinking going back to the old days, you 10 know, when all they built was hotels and 11 casinos, casino hotels here in Atlantic City. 12 And when the Plaza come along and the Taj came 13 along, they were such new types of thinking 14 involved in those projects -- 15 THE WITNESS: Uh-hum. 16 COMMISSIONER SOMMELING: -- at that 17 time. We all thought which was the way they 18 were going to go. Then sooner later somebody 19 came up with the casino resorts. 20 THE WITNESS: Uh-hum. 21 COMMISSIONER SOMMELING: And so IN the 22 long range plan, you ended up with the Borgata 23 out here at the -- 24 THE WITNESS: Right. 25 COMMISSIONER SOMMELING: -- Renaissance 145 Juliano 1 Point, and the Revel's next to you up in the 2 other side of the boardwalk next to Showboat 3 and that seems to be the thinking now is the 4 resort kind of investment -- 5 THE WITNESS: Uh-hum. 6 COMMISSIONER SOMMELING: Capital 7 investment that people want to make so that 8 they have all the amenities that you just 9 explained come forth in the resort and all the 10 outlets of entertainment that we have. 11 THE WITNESS: Uh-hum. 12 COMMISSIONER SOMMELING: That brings 13 them that gross operating profit for the year. 14 THE WITNESS: Uh-hum. 15 COMMISSIONER SOMMELING: From all those 16 sources of revenue. But one of the keys to 17 that, and I want to see if you agree with me, 18 is to bring in -- into this city -- 19 top-of-the-line restaurants, entertainment, 20 retail, gaming, et cetera, and eventually 21 hopefully conventions. And do you see us going 22 in that direction, and do you see Revel being 23 another type of plug that's going to be the 24 future of Atlantic City? 25 THE WITNESS: Yeah. I mean, I really 146 Juliano 1 do. Because, first of all, we had talked about 2 the fact that a lot of -- you won't see these 3 kind of complexes built in other other 4 jurisdictions. One of the reasons is you have 5 a very stable tax environment that is the 6 second best tax environment in the country. 7 And you have a stable regulatory environment. 8 And investors that are going to invest billions 9 of dollars into a city want to be assured of 10 those two things. 11 If you take a look at how you build this 12 whole destination resort with the entertainment 13 component that you're talking about, you'll see 14 that Boardwalk Hall is a great resource that we 15 have, and it is full all summer this year. 16 And, you know, we as an industry as we morphed 17 into this resort destination are becoming to 18 realize that it has to become about 19 restaurants. It has to be about entertainment. 20 It has to be things that people cannot drive 21 across the street and do at home. And I think 22 that, you know, we -- those kinds of things and 23 that kind of transformation is what we really 24 have to focus on. 25 COMMISSIONER SOMMELING: Thank you. 147 Juliano 1 CHAIR KASSEKERT: I hate to even ask 2 this question because you just so perfectly 3 summarized what I would have said if I had been 4 asked the same question, but how do your 5 plans -- and this is back to the discussions 6 about the Marina. How would your plans change 7 if you don't find a suitable buyer with respect 8 to the Marina and you decide to keep the 9 property? Would that change your overall 10 perspective? 11 THE WITNESS: Well, it wouldn't change 12 our overall perspective because, you know, we 13 would still position three hotels the way we do 14 now, and we would just to have to really 15 operate smarter there. 16 CHAIR KASSEKERT: Uh-hum. 17 THE WITNESS: And we would have to make 18 the decision moving forward whether we want to 19 spend the capital to get it to where we need it 20 to or continue to look for a buyer or a 21 partner. But, you know, again, the company 22 having the three unique locations that they do 23 is a big advantage for us. 24 CHAIR KASSEKERT: Thank you. 25 Any other questions? 148 Juliano 1 COMMISSIONER SOMMELING: I have one more 2 question, Madame Chair. 3 CHAIR KASSEKERT: Sure. Commissioner 4 Sommeling? 5 COMMISSIONER SOMMELING: I had -- I 6 heard Mr. Burke mention the fact that there 7 would be cappex with -- years before -- geared 8 towards maintenance for the clubs over the next 9 couple, three years, I guess. 10 THE WITNESS: Uh-hum. 11 COMMISSIONER SOMMELING: In anticipation 12 of that, that would be including the Trump 13 Marina, although the Trump could be sold. 14 THE WITNESS: Right. 15 COMMISSIONER SOMMELING: But I think 16 also would we like to know -- we would like to 17 know, cappex toward -- geared toward expansion 18 of your facilities would be something that 19 would be after that first two- or three-year 20 period? 21 THE WITNESS: Well, no. I think what we 22 are doing now, once we close the transaction 23 and we're sure that the capital is coming into 24 the company, we will prioritize some projects 25 that need to be done, projects that we have not 149 Juliano 1 gotten to. At the renovation of the Taj, for 2 example, there's a few things left to do. And 3 when we get that priority, and we look to see 4 where the best return and where the appropriate 5 return would be, we'll make a recommendation to 6 the new board to approve it. So we won't wait 7 two or three years before we do anything. But 8 we'll just have to be sure that it's prudent 9 and that we have -- it maintains that 10 flexibility that we'll need with our cash 11 reserves. 12 COMMISSIONER SOMMELING: Thank you. 13 That's all. 14 CHAIR KASSEKERT: Thank you. You may 15 step down. 16 THE WITNESS: Thank you. 17 CHAIR KASSEKERT: Mr. Casiello, any 18 other witnesses? 19 MR. CASIELLO: No, Madame Chair. 20 CHAIR KASSEKERT: Okay. We'll now move 21 to closing statements. 22 Mr. Fogarty? 23 MR. FOGARTY: Probably shorter than I 24 was on my opening. We filed that report, and 25 you know what we recommended, and I have seen a 150 ITEM NO. 21 1 draft, copy of the draft resolution. And we 2 have no objection if that's your pleasure to 3 enter. 4 CHAIR KASSEKERT: Thank you. 5 Mr. Casiello? 6 MR. CASIELLO: I think I already said 7 that we have no objection to the form of the 8 Commission's resolution. 9 CHAIR KASSEKERT: Uh-hum. 10 MR. CASIELLO: As you heard from the 11 testimony of Mr. Burke, the CFO of the company, 12 and Mr. Juliano, the CEO of the company, if 13 approved by this Commission today, this plan 14 will dramatically reduce the debt of the 15 company from almost $1.75 billion to 16 approximately $344 million. The company will 17 probably have the best capital structure it has 18 ever had, and it will have a significant cash 19 cushion from the rights offering. The company 20 will be well poised to face the challenges that 21 face the casino industry in Atlantic City. 22 With that, I ask that you approve the 23 plan, temporarily qualify the proposed new 24 directors, and waive the qualification 25 requirement for all of the institutional 151 ITEM NO. 21 1 investors who have filed certifications. 2 I would also like to take this 3 opportunity to thank your staff, especially Ms. 4 Wozniak who I think is an excellent attorney 5 and a pleasure to work with. And I have to say 6 that because I've been doing this for almost 30 7 years. This is the first time we have worked 8 together. 9 CHAIR KASSEKERT: Oh. Hum. 10 MR. CASIELLO: Thank you. 11 MR. NANCE: Wow. 12 CHAIR KASSEKERT: Very good. Thank you 13 very much. 14 We're going to take a brief recess. 15 (A recess was taken from 3:00 to 3:15 16 p.m.) 17 CHAIR KASSEKERT: Thank you. We'll go 18 back on the record. 19 Let me ask at this point if there are 20 any other matters that need to be brought to 21 our attention at this time? 22 MR. CASIELLO: Nothing further, Madame 23 Chair. 24 MR. FOGARTY: Not from the Division. 25 CHAIR KASSEKERT: Nothing. Thank you. 152 ITEM NO. 21 1 Let me start our remarks by also 2 thanking our staff. I know that they hate it 3 when I do this, but we could not get through 4 these kind of kinds of proceedings without the 5 excellent staff that we have both in our Legal 6 Division and our Financial Division who really 7 make us look good and really help us to 8 understand these very complicated issues. And 9 I know they don't like to be thanked but -- and 10 that's all I can give you is thanks. 11 (Laughter.) 12 CHAIR KASSEKERT: But I truly appreciate 13 it. 14 And let me thank also the Division staff 15 who I know work equally hard in providing us 16 the important information we need to make these 17 decisions. So Mr. Fogarty, Mr. Latimer, and 18 crew, thank you as well. 19 MR. FOGARTY: Thank you, Chair. 20 CHAIR KASSEKERT: First of all, I note 21 for the record that the petition requests 22 numerous and varied rulings related to the 23 approval of the reorganization plan. Some of 24 the more technical rulings do not raise any 25 novel issues, and I need not go into detail 153 ITEM NO. 21 1 here other than to point out that these are 2 specifically addressed by the draft resolution. 3 That document has been shared with the parties 4 and is marked as Exhibit C-1 for 5 identification. 6 Several rulings, however, do warrant 7 mention. As I noted earlier, the Commission 8 today granted ICA to Avenue New Jersey as a 9 holder of the new Trump common stock. The 10 draft resolution would grant waivers of 11 qualification to seven other equity holders who 12 qualify as institutional investors under 13 Section 85f of the Casino Control Act. 14 Second, the Division has reported 15 favorably on the qualification of a new 16 qualifying Trump entity, TEHR -- TERH, LP, Inc. 17 The Division, likewise, concurs in the 18 temporary qualification of the six designees 19 who, in addition to Mr. Juliano, will serve on 20 the reconstituted Trump Entertainment Board of 21 Directors. 22 I am satisfied that all of the statutory 23 requirements have been met and that each of the 24 aforementioned rulings is appropriate. 25 Much of this afternoon's hearing has 154 ITEM NO. 21 1 been focused on the Petitioner's ability to 2 meet the statutory financial stability standard 3 as defined by the Commission's regulatory 4 criteria. Our statute tasks us with the 5 responsibility to determine whether the Trump 6 licensees will continue to meet those criteria 7 upon the consummation of the reorganization 8 plan. 9 In 2005, this Commission similarly 10 examined a Trump restructuring. I at that time 11 expressed my hope that a reorganization would 12 enable the company to reinvest in the 13 properties and to effectively compete not only 14 within Atlantic City but within -- but with the 15 new competition in other jurisdictions. 16 Regrettably, five years later we have 17 yet another reorganization plan before us at a 18 time when Atlantic City operators confront 19 ever-increasing competition from our 20 neighboring states and now cope with the impact 21 of a depressed economy. 22 The reorganization plan before us today 23 will, once again, attempt to address such 24 concerns, reducing total debt from $1.7 billion 25 to 334 million, decreasing annual interest 155 ITEM NO. 21 1 expense, and extending maturities. The 2 Commission has examined that plan in detail, 3 reviewed an extensive record, and today heard 4 the testimony of Mr. Burke and Mr. Juliano and 5 the comments of counsel. 6 We've also received the report of the 7 Division of Gaming Enforcement which concludes 8 that the Petitioners minimally satisfy the 9 statutory standards for financial stability 10 through the licensing period. With the benefit 11 of that report and review of the documents in 12 the record and consideration of the testimony 13 presented this afternoon, I can conclude that 14 the Petitioner has sufficiently met its 15 statutory burden, establishing that it will 16 continue to satisfy the Commission's financial 17 stability requirements upon consummation of the 18 reorganization plan. 19 While I can so find, I am fully 20 cognizant of the contingencies and 21 uncertainties which may impact the relevant 22 forecasts and projections. I thus agree with 23 the Division's recommendation that we impose 24 conditions to enable the regulatory agencies to 25 continuously and closely monitor the Trump 156 ITEM NO. 21 1 licensees' financial condition through the 2 license period. Accordingly, I would condition 3 our approval upon the recommended continuous 4 monthly financial reporting throughout the 5 remainder of the license term which runs 6 through June of 2012. 7 To further ensure effective monitoring, 8 conditions in the draft resolution require 9 Trump Entertainment to provide updates, 10 information, and documentation to the 11 Commission and Division within 20 days of the 12 effective date of the plan and on an ongoing 13 basis. 14 Finally, I support a condition requiring 15 prior Commission approval of any cash 16 distributions or dividends other than those 17 prohibited by an amended and restated credit 18 agreement. 19 I do want to take, again, this 20 opportunity to congratulate everyone in the 21 process that has culminated in this hearing 22 today. I am hopeful that the implementation of 23 this reorganization plan will ultimately 24 provide the Trump properties with the means to 25 compete and to thrive. 157 ITEM NO. 22 1 So, accordingly, I thus moved to approve 2 the Trump reorganization plan and grant the 3 requested relieve as set forth in and subject 4 to the conditions in the draft resolution. 5 COMMISSIONER EPPS: Second. 6 CHAIR KASSEKERT: And I so move, and 7 there's a second. 8 This is a roll call vote. 9 MR. NANCE: Commissioner Sommeling? 10 COMMISSIONER SOMMELING: Yes. 11 MR. NANCE: Commissioner Epps? 12 COMMISSIONER EPPS: Yes. 13 MR. NANCE: Commissioner Fanelle? 14 COMMISSIONER FANELLE: Yes. 15 MR. NANCE: Vice Chair Harrington? 16 VICE CHAIR HARRINGTON: 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 Congratulations. 23 MR. CASIELLO: Thank you, Commissioners. 24 MR. NANCE: Item No. 22 has been 25 withdrawn at the request of the Petitioner. 158 1 In accordance with Resolution No. 2 09-12-16-20, the next closed session of the 3 Commission shall be held on Wednesday, August 4 4th, 2010, at 9:15 a.m. in the Commission 5 offices. It is now time for the public 6 participation portion of the meeting. 7 CHAIR KASSEKERT: Is there anyone from 8 the public that wishes to be heard? 9 (No response.) 10 CHAIR KASSEKERT: Seeing no one, I'll 11 declare this portion of the meeting closed and 12 entertain a motion to adjourn. 13 COMMISSIONER SOMMELING: Motion to 14 adjourn. 15 CHAIR KASSEKERT: Is there a second? 16 COMMISSIONER EPPS: Second. 17 CHAIR KASSEKERT: The motion has been 18 made and seconded. All in favor? 19 (Ayes.) 20 CHAIR KASSEKERT: Opposed? 21 (No response.) 22 CHAIR KASSEKERT: The motion carries. 23 MR. CASIELLO: Thank you. 24 (Public Meeting 10-07-14 was adjourned 25 at 3:21 p.m.) 159 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: July 18, 2010 23 My Notary Commission Expires July 22, 2014 24 ID No 2062871 25