Last week, on June 19, 2014, Atlantic City’s Revel Resort and Casino filed for Chapter 11 Protection. Revel began as a centerpiece of New Jersey Governor Chis Christie’s effort to bring Las Vegas-quality gambling to Atlantic City’s declining gaming business. Revel opened in April 2012 to great fanfare, but revenues soon proved to be an immediate disappointment as the casino’s emphasis on attracting spa visitors and diners over gamblers backfired.
Revel filed for bankruptcy protection for the first time in March 2013, less than a year after the $2.4 billion resort and casino opened. It emerged from bankruptcy in May 2013 after securing court approval for a restructuring plan that slashed its debt load by $1.2 billion to less than $300 million. The plan was a debt-for-equity swap, meaning Revel’s creditors traded the debt they held for equity in the reorganized company. Three-quarters of its $1.5 billion debt was erased in exchange for the casino’s lenders gaining an 82 percent share of the property.
The high-end resort and casino stands at 47 stories high and is the tallest building in Atlantic City. Revel currently employs 3,140 people. According to court documents, Revel listed liabilities of between $500 million and $1 billion in its bankruptcy petition, filed with the U.S. Bankruptcy Court in Camden, N.J. It’s reported assets in the same range.
“The reality of the Revel situation today is that Revel has lost this year alone $75 million,” John Cunningham, a White & Case attorney who represents the casino, told Judge Gloria Burns. “Even in peak summer season, Revel losses $2 million a week and relies on borrowed funds.”
Revel has received court approval to borrow $23.9 million that it said would keep the 1,400-room resort operating for the coming month as it scrambles to find a buyer. Revel warned employees Thursday that it would lay them all off beginning on Aug. 18 if it could not find a buyer. The company will return to court on July 11 and could seek to increase the amount it borrows to $41.9 million.