ATLANTIC CITY, N.J. (AP) -- Stockton University cast a wide net of blame Tuesday for its failed efforts to turn a former casino into a satellite campus, even as it seeks new buyers for the property.

Showboat Casino Hotel
Showboat Casino Hotel (AP Photo/Wayne Parry)
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It released a report that assigned blame to many parties, including a former university president who failed to let the board know of a legal deal-breaker that had not been resolved. It also blamed the lawyer working on the deal for Stockton, who it said didn't warn the university the deal was a bad one and who hadn't been admitted to practice law in New Jersey.

It blamed seller Caesars Entertainment for saying certain deed restrictions would be waived; they weren't, and that caused the deal to fall through.

The inquiry was commissioned by Stockton's board of trustees and completed by an outside law firm it hired.

The attorneys said the board had become too deferential to former President Herman Saatkamp, but they also said the trustees weren't given all the information they needed to assess whether the deal was worth doing.

"Saatkamp's leadership style, and haste to obtain approval of the deal, hampered debate" and resulted in the board "not learning of critical facts," the report said.

The Showboat closed Aug. 31, 2014. Stockton bought it in December 2014, announcing plans to convert it into an urban satellite campus that the suburban university had long wanted to establish.
The university paid $18 million for the property, which came with a set of competing deed restrictions. One, placed by Caesars Entertainment, prohibited the property from being used as a casino. But there also was a 1988 legal covenant among the Showboat, the Trump Taj Mahal and Resorts casinos requiring the Showboat never be used for anything other than a casino.

The report determined Saatkamp knew Trump Entertainment Resorts was refusing to waive the 1988 deed restriction but didn't tell the board.

The report considered whether Saatkamp was eager to complete the deal because he and his wife would have been given an oceanfront residence on the 14th floor.

Saatkamp decided against moving there in March. He said he acted in the best interest of Stockton and placed blame on an outside lawyer advising him.

"The fact is that outside legal counsel reviewed, approved and recommended the transaction," Saatkamp said in a statement.

The report blamed attorney Stevan Sandberg for not advising Saatkamp to walk away from the deal and said the attorney wasn't admitted to practice law in New Jersey.

Sandberg's law firm said it disagrees with parts of the report but couldn't comment further because of its ongoing representation of the university. Caesars Entertainment said everyone involved in the deal knew of the competing deed restrictions and any suggestion it was less than forthright about the sale is false.

The report came the day New York private equity investor Jeffrey Keating said he has contacted Stockton about buying the Showboat for "significantly more" than the university paid for it. He said his initial intention is to operate it as a non-gambling property while maintaining the option to restore casino gambling there.

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