Tropicana Entertainment announced that it has reached an agreement with its creditors that could see the company emerge from Chapter 11 bankruptcy protection as early as May.

A filing in U.S. Bankruptcy Court said part of the restructuring of the company will result in splitting off the Las Vegas casino into a separate company that would be partly owned and headed by MGM Mirage executive Alex Yemenidjian.

Additionally, the agreement might aid the company’s efforts to regain control of the Tropicana in Atlantic City, according to CEO Scott Butera.

All told, the deals will convert about $2.5 billion of debt into equity for all the company’s holdings except the Las Vegas property, while $440 million of debt will be converted to equity in Las Vegas.

“We will emerge with substantially no debt, positive cash flow and money to reinvest in our brand,” Butera said. “It opens the door for us to regain control of the Atlantic City casino because we will be a healthy company.”

The deal also severs all links with former company owner William Yung III.

The company started distributing ballots to debtholders who have until April 17 to vote on the proposal.

Butera said the deal will also benefit the overall health of the company by removing the debt obligations that so many other operators are struggling with.

“All these companies that have all this debt are going to be living check-to-check unless they can do something about it,” Butera said. “We don’t have that issue. Our properties are all positive cash flow.”

In addition to court and debtholder approval, the deal also requires regulatory approval.

By Casino Connection Staff