By Richard N. Velotta

Wed, Aug 6, 2008 (4:46 p.m.)

The state Gaming Control Board recommended today allowing a four-man board to take control of the Tropicana as it wends its way through bankruptcy.

If approved by the Nevada Gaming Commission when it meets Aug. 21, the action would take the unprecedented step of giving an unlicensed board financial control over a Nevada casino.

In most bankruptcy cases, financial decisions are made by a receiver or trustee.

New Jersey regulators stripped the Tropicana of its license in December and the company filed for bankruptcy protection in May.

The board of managers, composed of Chairman Thomas Benninger, Scott Butera, Bradford Smith and Michael Corrigan, would control Tropicana Entertainment LLC, the parent company of the Tropicana. The four board members are seeking licensing, a process that normally takes several months.

Butera, a former Wall Street investment banker who manages the Las Vegas property, told the Control Board that former Chief Executive Bill Yung is no longer involved in decision-making at the company.

Butera, who was hired in 2003 to turn around the financial fortunes of Trump Hotels and Casino Resorts, also told regulators that the company is moving its headquarters from Crestview Hills, Ky., to Las Vegas, and that it’s in negotiations with the Culinary Union for a new contract and hopes to make an announcement about that in 30 to 60 days.

Under Yung’s direction, the company took a hard-line approach in negotiations with the union, demanding that it give up a company-funded health plan.

Union workers have been without a contract since December.

In making the recommendation for the unusual management arrangement, Control Board Chairman Dennis Neilander said that the board is not planning to offer similar arrangements to other companies but the Tropicana circumstances warranted that solution.

The Control Board’s decision includes Tropicana properties at Lake Tahoe and in Laughlin, as well as the Las Vegas property.

In most cases involving bankrupt casino companies that regulators have seen, the licensed companies only had operations in Nevada. The Tropicana also has operated in New Jersey, Louisiana and Indiana.