Superior Court Judge William C. Todd III refused Mortgage trustee U.S. Bank National Association’ request to place the Atlantic City Hilton Casino Resort in receivership so that another party operates the casino and pursue its sale, on grounds that although the casino is losing money, any receiver he appointed could not significantly improve matters, adding: "I am not convinced that appointing a receiver for the Atlantic City property now accomplishes anything."

The Hilton is losing money and the investment firm Colony Capital LLC hasn't made a mortgage payment on it since last year. U.S. Bank and mortgage holder J.P. Morgan Chase Commercial Mortgage Securities Corp. could save money in the short term by shutting down the casino but would be in a better position to sell a working facility.

The lender is also pursuing receivership in the state Court of two Colony-owned Mississippi casinos, whose income is partly used to defray losses at the Hilton. The three casinos owe $500 million on their combined mortgage. U.S. Bank attorney Joseph Lubertazzi Jr., said that the bank is pursuing foreclosure: "There is money being spent in a way we find objectionable. We do not want the borrower in control of the cash." The attorney estimated the three casinos' combined value is US $100 million to US $200 million less than their mortgage debt.

Todd scheduled an Oct. 29 follow-up hearing, knowing that several factors could soon prompt a fresh look at the Hilton's situation, adding: “There’s no reason to pretend this will all go away." However, before that date, the New Jersey Casino Control Commission might opt for receivership, which would suit potential buyers Landry's Restaurants, parent company of the Las Vegas Golden Nugget Casino.

Landry's attorney Lloyd D. Levenson said that the property would most likely be acquired through a receiver: "I think the Golden Nugget still has an interest in acquiring the property," Scheinthal.” The casino now known as the Hilton first opened as the Golden Nugget in December 1980, when the property was owned by Steve Wynn. He sold his interest in 1987. Landry’s ownership would give more than a lease of life to the beleaguered Atlantic City casino. (E-09.28.10)

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