Atlantic City Emergency Manager Kevin Lavin hired restructuring lawyers from Skadden Arps Slate Meagher & Flom LLP as the New Jersey gambling hub deals with a $101 million deficit and a tax base battered by casino closures.
The firm will help the junk-rated city as it seeks to eliminate the deficit and “position itself for long-term financial stability,” Bill Nowling, a spokesman for Lavin, said Wednesday.
“Financial restructuring is a complicated endeavor requiring specialized legal, financial, and operational services,” Nowling said.
Governor Chris Christie in January appointed Lavin to come up with a plan to revive the finances of the city, where four of 12 casinos closed last year.
The governor’s move led Moody’s Investors Service and Standard & Poor’s to downgrade Atlantic City’s debt because of the risk that a turnaround plan could foist losses on bondholders. Standard & Poor’s ranks the city BB, two steps below investment grade. Moody’s grade is lower at Caa1.
In a March report, Lavin said he may seek to defer debt payments and cut jobs.
Nowling said he couldn’t immediately provide details on the compensation for the law firm, which is a “multi-month engagement.”