The torturous journey of finding a new owner for one of Atlantic City's biggest casinos is drawing to a close - finally.

U.S. Bankruptcy Judge Judith Wizmur approved the sale of the Tropicana Casino & Resort yesterday to a group of creditors led by billionaire Carl Icahn. The group, which holds a $1.4 billion mortgage on the casino, will swap $200 million in debt for ownership.

The final step is for the New Jersey Casino Control Commission to grant interim casino authorization to the group for it to take possession. The sale is expected to close before the end of the year.

"The court's approval . . . is a major step toward the successful completion of this transaction," former New Jersey Supreme Court Justice Gary S. Stein said in a statement. "The court's decision has added a level of certainty to the Tropicana's future and we are grateful for that."

Stein was put in charge of finding a new owner for the Tropicana after its former owner - William Yung - was stripped of his gaming license in December 2007 for numerous health and management violations.

The state gambling commission must next determine what form the new buyer will take - a wholly owned subsidiary of the reorganized Tropicana group or a stand-alone entity created by the lenders. That hearing will likely take place next month.

"All of us at the Tropicana look forward to working with our new owners, and we are optimistic that the Casino Control Commission will approve their filings as soon as possible," Tropicana president and chief operating officer Mark Giannantonio said after the decision in U.S. Bankruptcy Court in Camden.

The Tropicana, like every other Atlantic City casino, has been affected by the struggling economy and slots competition from Pennsylvania. The Tropicana reported a 17.4 percent decrease in revenue last month compared with a year ago - but it was by far not the worst performer. Six of the city's 11 casinos reported bigger revenue declines.

When the Tropicana went on the block Feb. 18, 2008, it was expected to fetch about $1 billion. But the tanking economy, the implosion of several Wall Street investment firms, and frozen credit markets slowed the sale process - and lowered the price - considerably.

Icahn's group surfaced in the spring as an interested buyer. On April 29, the state gambling commission approved Stein's request to sell the casino in a bankruptcy court auction.

The approval cleared the way for the Icahn group to set the floor bid with its $200 million credit offer. Since no additional qualified bids were received by the May 29 deadline set by Judge Wizmur, there was no need for an auction.

Icahn bought the former Sands Casino Hotel in Atlantic City out of bankruptcy in 2000 for $65 million, and sold it and adjacent beachfront property to Pinnacle Entertainment Inc. of Las Vegas in 2006 for $275 million.

Pinnacle imploded the Sands in October 2007 to build a $1.5 billion mega-casino, but it has yet to secure the project's financing, and the land sits vacant.

"Icahn owning the property is a positive, as the new owner will now provide operational clarity and perhaps some new investment in the Tropicana," said gambling analyst Andrew Zarnett of Deutsche Bank AG.

At the Tropicana

Full name: Tropicana Casino & Resort

Date opened: Nov. 26, 1981

Hotel rooms: 2,129

Employees: 3,425

Gaming floor size: 147,240 square feet

Slot machines: 3,220

Table games: 135

SOURCE: Tropicana

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Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.