Eldorado's acquisition in Indiana falls through

The proposed purchase of an Indiana hotel casino by Reno's Eldorado Resorts LLC has fallen through, the casualty of turmoil in the credit markets.

The purchase of Casino Aztar, a riverboat property at Evansville, Ind., was scheduled to close at the end of 2008. The Indiana casino is owned by Tropicana Entertainment LLC of Las Vegas.

Both sides quietly walked away from the transaction, signing a confidentiality agreement about the terms of the breakup. Last year, Tropicana said it would face a breakup fee of $6.6 million and would reimburse as much as $500,000 in costs incurred by Eldorado Resorts if the transaction wasn't completed.

Neither side announced that the sale of the Indiana fell through.

But Tropicana, a publicly held company that's reorganizing under Chapter 11 of the federal bankruptcy code, filed a reorganization plan this month that calls for the company to continue operating the Indiana property.

A.J. "Bud" Hicks, an attorney with McDonald Carano Wilson who represents Eldorado Resorts, said the transaction came unraveled as the financing of the purchase became "extraordinarily expensive" with the meltdown of U.S. credit markets last autumn.

Eldorado Resorts planned to pay $190 million in cash along with a $30 million note for the Indiana casino. It also proposed to pay another $25 million if the riverboat property met financial benchmarks after the acquisition.

The riverboat property included 47,800 square feet of casino space and 347 hotel rooms.

Eldorado Resorts owns the Eldorado Hotel & Casino and a half interest in the Silver Legacy.