Revel Casino’s recently announced second bankruptcy filing is a big blow to Atlantic City and a signal that perhaps the city’s best and most lucrative days long gone. At least for a while.
In 2006, Atlantic City’s casinos brought in a total of about $5 billion; that revenue has been cut in half now, mainly due to a stagnant economy and competition in New York and Pennsylvania. Further, New Jersey’s 2013 decision to legalize online gambling here has allowed many to participate from the comfort of their homes without traveling to South Jersey.
Revel filed its second Chapter 11 bankruptcy petition in less than three years on June 19. The company sent employees a letter at that point warning that if the $2.4 billion casino did not get a buyer, it could be forced to close its doors as soon as Aug. 18. The letter did say that the casino plans to remain open for business during the search for a buyer.
The casino’s first run in with bankruptcy came in March of 2013, less than a year after it opened. In its initial Chapter 11 filing, Revel slashed its debt from approximately $1.52 billion down to $272 million, according to the filing. In exchange for this debt relief, creditors took equity in the casino. Revel’s most recent bankruptcy filing showed that Chatham Revel VoteCo LLC, Canyon RC Holdings and American High-Income Trust owned a total of 54.6 percent of Revel’s stock. In total, creditors gained an over 80 percent share in the property.
Chapter 11 bankruptcy protection is a valuable tool for small and large business owners, who are struggling with debts and revenue, but do not want to give up on their business goals. As opposed to just liquidating the company through Chapter 7 bankruptcy, Chapter 11 allows business owners to reorganize their debt and find other investors to help keep the business afloat.
Contact the New Jersey Bankruptcy attorneys at Garland & Mason, L.L.C. today to discuss your financial situation and your options going forward. We have been guiding NJ residents toward fresh financial starts through bankruptcy protection for over 25 years.