Revel AC Inc., owner of an Atlantic City, New Jersey, casino, won court approval to exit bankruptcy under a deal with creditors that cuts debt and gives them ownership of the resort just 13 months after it opened.
U.S. Bankruptcy Judge Judith H. Wizmur said she would sign an order approving the reorganization plan once company lawyers make final wording changes to accommodate creditors. Under the deal, negotiated before the bankruptcy filing, lenders agreed to a plan that will cut Revel’s debt by more than 82 percent to $272 million from $1.52 billion.
“I can conclude, based on the record before me, that a reasonable prospect for success in the future has been shown,” Wizmur said during a hearing today in U.S. Bankruptcy Court in Camden, New Jersey.
Revel filed bankruptcy in March, listing $1.1 billion in assets and $1.5 billion in debt. The company had lined up enough creditor support for its so-called prepackaged bankruptcy, that it was able to win approval for an exit plan more quickly than normal.
The new board members of Revel will include Thomas M. Benninger, co-founder and managing general partner of Global Leveraged Capital, and Peter E. Murphy, founder and chairman of Wentworth Capital Management, according to court documents.
Jeffrey Hartmann, the interim chief executive officer, will be paid $1 million annually and be eligible for a bonus of as much as $312,000, depending on Revel’s earnings before interest, taxes and depreciation, a common financial measure used to judge a company’s performance. Hartman will also receive $15,000 a month for expenses and a free hotel room set aside for his use, Revel said in court papers filed May 10.
Casinos in Atlantic City have struggled with competition from new gambling venues in Philadelphia about 60 miles (97 kilometers) away and a weak economy. Wizmur also oversaw the bankruptcy of Trump Entertainment Resorts Inc., the Atlantic City casino company named for, and once partly owned by, Donald Trump.
Revel, Atlantic City’s first new casino since 2003, opened in April at a cost of $2.6 billion before being closed for five days starting Oct. 28 because of Hurricane Sandy. Gambling revenue in Atlantic City fell 13 percent in January to $205.6 million, the New Jersey attorney general’s office said in a Feb. 11 statement.
The Revel casino and resort, on Atlantic City’s Boardwalk, has about 130,000 square feet of gaming space, with 2,400 slot machines, 130 table games and a poker room, according to the bankruptcy filing. The resort has 1,399 rooms, indoor and outdoor pools, 11 restaurants, two night clubs and a 5,500-seat theater. The resort employs about 5,500 people.
The case is In re Revel AC Inc., 13-bk-16253. U.S. Bankruptcy Court, District of New Jersey (Camden).
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