William J. Yung III has resigned as chief executive of U.S. casino operator Tropicana Entertainment Holdings to be replaced by company president Scott C. Butera. Both Yung and Butera will sit on a newly-formed board of directors that will guide Tropicana through a restructuring following the bankruptcy of its Atlantic City casino and resort property.
Yung's resignation follows sharp criticism from Tropicana's investors. Yung made the decision to cut a quarter of the work force (around 1,000 jobs) at Tropicana Resort and Casino in Atlantic City, which reportedly left the facility understaffed, unsanitary and unable to fulfill its operational requirements, ultimately leading the New Jersey Casino Control Commission to revoke its gaming license in December, followed by a declaration of bankruptcy last month.
Yung is the owner of Kentucky-based hotel company Columbia Sussex Corp, of which Tropicana Entertainment is an affiliate. Tropicana investors do not think Yung's resignation goes far enough and would like to see him removed from the board of directors and stripped of his shareholders rights.
"We've made it known that we're going to continue to press our trustee motion unless Yung is off the board and has no say over management. It just doesn't go far enough," Edward Weisfelner, a lawyer representing Tropicana bondholders told Press of Atlantic City. "There is no independent board or management as long as he retains the right to get rid of the board and change the management."
Tropicana bondholders are owed more than $960 million. They have asked the bankruptcy court to remove Yung from the board and appoint a trustee to control Tropicana. Senior Point Capital and other creditors have asked the same of the court.
Tropicana Entertainment still owns casinos in Nevada, Mississippi, Indiana and Louisiana. The board will consider moving corporate headquarters from Kentucky to Las Vegas.
Tropicana's Atlantic City property is now under the control of state-appointed conservator Gary S. Stein, who says unreasonably low bids have slowed the process of finding a buyer. Stein has asked the Casino Control Commission to extend the sale deadline to October.
Taking over as chief executive, Scott C. Butera is a former chief operating officer and executive vice president of Trump Hotels & Casino Resorts, having guided the company's three Atlantic City casinos through bankruptcy in 2005.
Also joining the board is Bradford S. Smith, a gaming and regulatory consultant who previously served as chairman of the New Jersey Casino Control Commission. Smith is also a former New Jersey State Senator.
The other two board members are Thomas M. Benninger, a founding managing general partner of Global Leveraged Capital, a private merchant banking firm that actively pursues proprietary origination of leveraged corporate debt, and Michael C. Corrigan, a media and entertainment executive with experience in operations, strategic planning and finance.