Tropicana files lawsuit

CRESTVIEW HILLS, Kentucky -- (PRESS RELEASE) -- Tropicana Entertainment, LLC said today that it filed a motion with Delaware Chancery Court on March 21 to enjoin Wilmington Trust Company (WTC) and the bondholders it represents from interfering with the company's right to cure a technical default in the indenture governing $960 million in Senior Subordinated Notes the company issued to acquire, among other things, the Tropicana Casino in Atlantic City.

The default was occasioned by a New Jersey Casino Control Commission order transferring title to the Tropicana Casino in Atlantic City to a conservator after the company's gaming license was not renewed last December. On March 12, the conservator, Justice Gary S. Stein, formally asked the Commission to take steps to re-convey the title to Tropicana's Adamar subsidiary, a move which would effectively cure the technical default under the indenture and, at the same time, enhance his ability to sell the Tropicana Atlantic City. The re-conveyance would not affect Tropicana's license status.

The company believes that after the non-renewal of the New Jersey license a small group of hedge funds directing WTC's actions purchased a significant position in the company's bonds in the secondary market at a substantial discount and has been trying unsuccessfully to accelerate repayment of the bonds ever since. Their latest attempt seeks to hinder and prevent a cure of the technical default by filing voluminous papers opposing Justice Stein's petition to re-convey the title. The action, which is inconsistent with WTC's previous demand that the company cure the technical default, caused the Commission to delay a hearing on the matter to April 2 from March 19, its originally scheduled date.

The Delaware Chancery Court denied other WTC default claims earlier this month. In fact, the Court granted summary judgment in favor of the company – and against WTC – on all of the default counts it considered, except the one related to the title transfer which, the Court agreed, the company has 60 days, or until April 20, 2008, to cure.

Tropicana's motion before the Chancery Court also contends that WTC's opposition to the title transfer constitutes a breach of the indenture on the part of WTC. That being the case, Tropicana has asked the Court to excuse its obligation to cure the technical default in the event that it remains uncured as of the April 20 deadline.

WTC has not yet responded to the company's motion and no hearing date has been set by the Chancery Court.

Although no assurances can be offered with respect to the outcome of any litigation, Tropicana believes that WTC's remaining claims are unfounded. The company is exploring all options available to it and will continue to vigorously oppose WTC's suit.