Closing arguments delivered in casino bankruptcy case

J.J. Johnson

Friday, June 30, 2000 | 11:01 a.m.

CAMDEN, N.J. -- Attorneys for Park Place Entertainment Corp. of Las Vegas and billionaire financier Carl Icahn delivered their closing arguments Thursday in the Sands Casino Hotel bankruptcy case, wrapping up several days of hearings over who should rescue the ailing casino.

U.S. Bankruptcy Court Judge Judith Wizmur announced she will issue her decision on the competing plans to pull the Sands out of Chapter 11 bankruptcy after July 10.

Park Place proposes spending $40 million on the property, receiving 57.5 percent of the new stock in exchange. It would provide bondholders with $128 million in new bonds.

Icahn plans to invest $65 million in property, receiving 46.3 percent of the new Sands stock. He would issue $110 million in new bonds.

Park Place attorney Michael Chertoff argued that Park Place essentially is offering a merger or joint venture with the other casinos it already operates, allowing the Sands to share costs and providing it with new, experienced management.

Chertoff characterized Icahn's proposal as a cash infusion that keeps existing managers.

But the Icahn plan provides more of a cash cushion, said his attorney, Ed Weisfelner. He denied the argument that casinos must be large to compete in Atlantic City, arguing that large Trump casinos have been in and out of bankruptcy.

"To hear them tell it you have to be out of your mind to have a single property in Atlantic City," Weisfelner said. "The notion that bigger is always better ... is not true."

Weisfelner also stressed that the Icahn plan has the support of Sands management, as well as the 1,500 vendors who are owed $6.7 million.

Park Place has the support of Merrill Lynch Asset Management, which argued that the Sands is in a poor location and needs a good management team.

Because Park Place owns 28 casinos, including the three in Atlantic City, it may face opposition from regulators on the Sands acquisition. New Jersey casino law allows authorities to decide on a case-by-case basis whether granting a license would result in economic concentration.