David Kasen Quoted by Philadelphia Inquirer and Philly.com Regarding Revel AC Inc.’s Bankruptcy

 

bankruptcy attorney's cherry hill, nj Revel AC Bankruptcy
The casino floor at Revel, which wants to get itself ready for the Shore’s summer season.

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.

“Revel needs the DIP money to survive, since it is substantially deleveraged,” he said.

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.

 

 

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David Kasen named 2013 New Jersey Super Lawyer

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Congratulations to David Kasen for being named a 2013 New Jersey Super Lawyer!

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Do you have questions about your finances? Call Kasen & Kasen to schedule a FREE INITIAL CONSULTATION (856) 424-4144.  The attorneys at Kasen & Kasen have over 40 years experience representing consumer and business debtors in bankruptcy.  David Kasen is board certified as a specialist in BOTH consumer AND business bankruptcy law.  Find out more about our firm by visiting www.kasenlaw.com.

Supreme Court Hears Oral Argument In Bankruptcy Case, Bullock v. Bank Champaign, N.A.

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On Monday, March 18th, the Supreme Court heard oral arguments in the bankruptcy case Bullock v. BankChampaign, N.A., 670 F.3d 1160 (11th Cir. 2012), (No. 11-1518, 81 U.S.L.W. 3228, 2012 U.S. LEXIS 8408).  The dispute in this case involves an obscure exception to the bankruptcy discharge for debts incurred through “defalcation.”

Generally, an individual who obtains bankruptcy relief is discharged from any future obligation with respect to all preexisting debts.  The discharge is subject, however, to exceptions for a variety of debts that in Congress’s view should not be discharged.  Section 523(a)(4) excepts from discharge (for individual debtors) debts “for . . . defalcation while acting in a fiduciary capacity.”

The Bankruptcy Code does not define the term defalcation and the appellate courts are not all in agreement.  The 4th, 8th and 9th circuits hold that even an innocent or merely negligent act by a fiduciary can be a defalcation.  The 5th, 6th, 7th and 11th circuits use a “recklessness” standard that requires something more than simple negligence but does not require proof of fraud or intention to harm the other parties.  And, the 1st and 2nd circuits have used an “extreme recklessness” standard, establishing something akin to conscious misbehavior.

The Supreme Court must now determine what is the correct standard for determining whether a debt was incurred through defalcation.

For more information call Kasen & Kasen to schedule a FREE INITIAL CONSULTATION (856) 424-4144.  The attorneys at Kasen & Kasen have over 40 years experience representing consumer and business debtors in bankruptcy.  David Kasen is board certified as a specialist in BOTH consumer AND business bankruptcy law.  Find out more about our firm by visiting www.kasenlaw.com.