By Suzette Parmley
Inquirer Staff Writer
Acknowledging the time constraints that Revel AC Inc. faces to get its financial house in order in time for the Shore’s summer season, U.S. Bankruptcy Judge Judith Wizmur on Wednesday approved a series of first-day motions by attorneys for the casino, including interim approval of $250 million in debtor-in-possession financing.
The money is a key part of Revel’s reorganization plan to exit from bankruptcy within 60 days, or by May 30. In its 390-page filing in U.S. Bankruptcy Court in Camden late Monday, Revel listed $1.1 billion in assets and $1.5 billion of debt.
Final approval for the debtor-in-possession financing is April 18 and for the restructuring plan is May 13.
The casino’s debt load and inability to generate sufficient gaming revenue since opening April 2, 2012, led to it filing for Chapter 11.
“We have a very compressed time frame and realize we have to stick within that time frame,” said Marc Kieselstein of Kirkland & Ellis L.L.P. in New York, counsel for Revel’s lenders, as he outlined the economics of the reorganization plan to Wizmur.
Under the pre-negotiated bankruptcy, lenders agreed to a debt-for-equity swap that will cut Revel’s debt to $272 million from about $1.5 billion, the company said. The debtor-in-possession financing, the company said, will be used to fund capital expenditures, marketing, and other expenses.
David Kasen, an attorney for one of the creditors – Stone Concrete Inc. of Egg Harbor Township – said he wanted to know if the DIP financing would impact claims against Revel. He said Stone had filed a construction lien against Revel for $15.3 million.
“I want to make sure the new money does not go to everything else before my client,” he said. “Obviously, we want to get paid.”
Representatives of creditors also sought clarification of the debtors’ intention with respect to the reorganization plan and the motions before the court on Wednesday.
The hearing was standard practice following a Chapter 11 filing and was largely administrative in nature. Wizmur set April 18 as the next hearing date.
“The first-day orders granted by the court further confirm that we will continue to operate our business as usual, and that the restructuring will not impact day-to-day operations,” said Revel’s new interim chief executive, Jeffrey Hartmann. He took over for Kevin DeSanctis, who resigned this month.
“We will continue to pay our employees, honor contractual obligations with our vendors, and maintain customer loyalty programs, without interruption,” Hartmann said.