Regulators approve Icahn’s takeover of casino; deal closes Sept. 29

John Curran

Wednesday, Sept. 13, 2000 | 4:20 a.m.

ATLANTIC CITY, N.J. - Billionaire financier Carl Icahn moved a step closer to owning the Sands Hotel & Casino on Wednesday after New Jersey regulators endorsed his plan to pull it out of bankruptcy.

In a 4-0 vote, the state Casino Control Commission approved Icahn's plan to invest $65 million in cash and issue $110 million in new bonds to prop up the casino, which has remained operating while reorganizing in bankruptcy.

The commission also granted the Sands a new four-year license, ruling that Icahn's takeover made it financially stable, which is one of the requirements for a casino license.

The takeover, which had already been approved by U.S. Bankruptcy Court Judge Judith Wizmur, will take effect Sept. 29.

Soon after, Icahn will begin paying off the vendors and other creditors who were owed $6.7 million when the Sands filed for Chapter 11 in January 1998. He will then install a board of directors to run the casino.

"He's bringing in some money, that's the main thing," said Sands dealer David Helveston, 29. "Carl Icahn is a businessman, and he's a gambler. I hope he brings in some high rollers because that's what we've been lacking."

The small 532-room off-Boardwalk casino, which occupies the middle of a block, has always struggled in the shadow of Bally's Park Place Casino Resort and other bigger competitors.

It reported losses of more than $35 million annually for the three years prior to the bankruptcy filing.

Sands President Alfred Luciani told commission members Wednesday that Icahn's cash and the issuance of the new bonds would free up the casino to build a new 282-room hotel tower, expand the casino and make other improvements.

He said the Sands would begin using Icahn's name and image in its advertisements, in hopes of generating excitement and luring gamblers back, like the former Golden Nugget casino did under president Stephen Wynn.

"We want to use Mr. Icahn as a personality," Luciani said.

Icahn, who owns two Las Vegas casinos, won out over Park Place Entertainment Corp. in his bid to take over the Sands, in part because the casino's unsecured creditors voted in favor of Icahn.

This weekend, the Sands will return the favor by sponsoring a two-day concert at The Sandcastle minor league baseball stadium.

Luciani said the event, which will benefit the American Red Cross and several local charities, is the casino's way of saying thank you to the community that supported the Sands and Icahn in the bankruptcy court battle for control.

Country singers Alabama, Darryl Worley, Mark Wills and The Kinleys will perform Friday and pop stars Mandy Moore, Vitamin C, and Baha Men take the stage Saturday.

Tickets are $27.50 to $37.50.

Luciani said he hopes the event will raise up to $40,000 for the Red Cross and other charities. The organizations will staff carnival-style amusement rides, sports challenges and dunk tanks on the field during the events.

The Atlantic City Surf baseball team also will make money off the event, through concession stand revenue. The team, which blames some of its attendance problems on lack of support by casinos, would like to see more events at the stadium, general manager Ken Shepard said.

"The Sands' participation is unique but refreshing. They're doing it solely for the community. We'd like to see more casinos take note of that, and do more things like this," Shepard said.