Just as in the past, the Gambling Commission which is supposed to prevent insolvent follies from being licensed, blessed the deal.
Atlantic City is the Poster Child for Predatory Gambling with its crime, poverty, corruption and community destruction. Facts don't change.
P.T. Barnum was right.
[To the right are categories that include the failed history and destruction of Atlantic City, as well as Governor Christie's hallucinations about Predatory Gambling.]
Revel casino files for Chapter 11 bankruptcy
Suzette Parmley, Inquirer Staff Writer
The company that owns Revel, the lavish yet financially troubled Atlantic City casino that opened just 10 months ago, announced Tuesday night that it is filing for bankruptcy protection.
Read more: http://www.philly.com/philly/business/20130220_Revel_Gambles_on_Bankruptcy.html#ixzz2LRmwX572
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NJ's bankrupt Revel suffers fate of other casinos
By WAYNE PARRY
Associated Press
ATLANTIC CITY, N.J. -- From the day it opened last April, Revel insisted it was a different kind of casino.
It shunned bus-riding day-trippers, banned smoking, hired a mostly nonunion workforce and told employees they'd have to reapply for their jobs every five years or so. It concentrated on the well-to-do leisure traveler and the business client instead of the slot-playing granny and opened up views of the ocean with floor-to-ceiling windows in a seaside resort where everyone else sought to keep gamblers focused on gambling.
Yet less than a year after it opened, Revel finds it has become like many other Atlantic City casinos: drowning under way too much debt, fighting for a share in a shrinking market and preparing for a date in bankruptcy court with major questions about its future looming large.
Revel said Tuesday that it will file for Chapter 11 bankruptcy protection in late March. The voluntary, prepackaged bankruptcy will wipe away about two-thirds of its $1.5 billion in debt by converting more than $1 billion of it into equity for lenders.
Kevin DeSanctis, Revel's CEO, said the restructuring will give the casino resort more flexibility to
operate, calling it "a positive step for Revel."
"The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility," he said.
Existing management will remain in place, no layoffs are planned, and employees and vendors will be paid as usual, the company said. The restructuring should be completed by early summer.
The $2.4 billion casino never caught on as much as it had expected to, and it remained mired toward the bottom of Atlantic City's 12 casinos in terms of casino revenue. Revel had to line up two rounds of additional financing since August to keep operating.
In January, it posted its second-worst month, winning less than $8 million from gamblers. During the second and third quarters of last year, it reported gross operating losses of $35 million and $37 million.
Revel's largely nonunion stance earned it the undying enmity of Local 54 of the Unite-HERE union, representing most of the city's casino workers.
"Over three years ago, Local 54 began expressing to every elected official in the city, the state and the governor's office that this project was doomed to failure," said Bob McDevitt, the union's president. "Had they listened to us three years ago, we would not have this catastrophe on our hands now."
Michael Drewniak, Gov. Chris Christie's press secretary, expressed confidence in Revel.
"We are committed to the resurgence of Atlantic City, the tourism district, and the many efforts currently under way to bring world-class attractions and entertainment to the city," he said. "A rejuvenated Revel will remain an integral part of that landscape, as it continues full operations as a premiere hotel, gaming and top-flight entertainment hub for the city, in addition to employing more than 2,000 people. Most importantly, none of those things that make Revel among Atlantic City's highest-profile attractions will change, as Revel uses this new financial flexibility and the continued backing of its investors to grow the business and be part of Atlantic City's expansion."
David Rebuck, director of the state Division of Gaming Enforcement, said the Chapter 11 filing needs to happen. "The agreement between Revel and its lenders will allow for a necessary financial restructuring and improve the property's financial condition going forward," he said. "We see this as a positive step that will allow Revel to comprehensively address its financial needs while continuing normal business operations." It is the latest in a series of recent bankruptcies involving Atlantic City casinos. Trump Entertainment Resorts emerged in 2010 from the third Chapter 11 bankruptcy that it or its corporate predecessors had filed, and the Tropicana Casino and Resort was sold that same year out of bankruptcy court to billionaire Carl Icahn.
As part of the restructuring, some of Revel's lenders will provide approximately $250 million in debtor-in-possession financing, about $45 million of which constitutes new money commitments and approximately $205 million of which is prepetition debt. No taxpayer funds will be used to finance the restructuring, the casino said.
The company didn't identify which lenders will be part of the filing; it said only that "a majority" of its lenders have agreed.
Revel was the first new casino built in Atlantic City since the Borgata Hotel Casino & Spa opened in 2003.
It was an ambitious, risky project in a declining market. It saw itself not as a casino resort but as a resort that happened to have a casino. But the distinction seemed to have been lost on many customers, who found its restaurants and hotel rooms pricey.
The project had to overcome numerous obstacles before its opening. Three key executives working on the project died in a Minnesota plane crash in July 2008; a worker pouring concrete was struck by lightning and killed in 2011.
The project ran out of money during the recession and had to stop construction halfway through. Morgan Stanley pulled out, taking a $1.2 billion loss on the project. It only got completed with the help of state tax incentives that were approved in February 2011.
Atlantic City was a bustling beach resort until the 1960s, when it became riddled with poverty, crime and corruption. The state approved casino gambling in 1976 and limited it to the city to boost its ailing finances.
The first casino, Resorts International, opened in 1978. Gambling revenue rose every year until 2007, when the 18-month recession began.
The city’s casinos have a history of debt troubles. Donald Trump’s Taj Mahal declared bankruptcy in 1990. Trump Hotels & Casino Resorts Inc. then filed for bankruptcy protection in 2004. The Tropicana filed for bankruptcy in May 2008 with $2.4 billion of debt. The Atlantic City Hilton missed an interest payment and other funding requirements on July 9, defaulting on a $348.2 million loan.
http://www.bloomberg.com/news/2013-02-20/revel-reaches-agreement-with-lenders-for-prepackaged-bankruptcy.html
It shunned bus-riding day-trippers, banned smoking, hired a mostly nonunion workforce and told employees they'd have to reapply for their jobs every five years or so. It concentrated on the well-to-do leisure traveler and the business client instead of the slot-playing granny and opened up views of the ocean with floor-to-ceiling windows in a seaside resort where everyone else sought to keep gamblers focused on gambling.
Yet less than a year after it opened, Revel finds it has become like many other Atlantic City casinos: drowning under way too much debt, fighting for a share in a shrinking market and preparing for a date in bankruptcy court with major questions about its future looming large.
Revel said Tuesday that it will file for Chapter 11 bankruptcy protection in late March. The voluntary, prepackaged bankruptcy will wipe away about two-thirds of its $1.5 billion in debt by converting more than $1 billion of it into equity for lenders.
Kevin DeSanctis, Revel's CEO, said the restructuring will give the casino resort more flexibility to
operate, calling it "a positive step for Revel."
"The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility," he said.
Existing management will remain in place, no layoffs are planned, and employees and vendors will be paid as usual, the company said. The restructuring should be completed by early summer.
The $2.4 billion casino never caught on as much as it had expected to, and it remained mired toward the bottom of Atlantic City's 12 casinos in terms of casino revenue. Revel had to line up two rounds of additional financing since August to keep operating.
In January, it posted its second-worst month, winning less than $8 million from gamblers. During the second and third quarters of last year, it reported gross operating losses of $35 million and $37 million.
Revel's largely nonunion stance earned it the undying enmity of Local 54 of the Unite-HERE union, representing most of the city's casino workers.
"Over three years ago, Local 54 began expressing to every elected official in the city, the state and the governor's office that this project was doomed to failure," said Bob McDevitt, the union's president. "Had they listened to us three years ago, we would not have this catastrophe on our hands now."
Michael Drewniak, Gov. Chris Christie's press secretary, expressed confidence in Revel.
"We are committed to the resurgence of Atlantic City, the tourism district, and the many efforts currently under way to bring world-class attractions and entertainment to the city," he said. "A rejuvenated Revel will remain an integral part of that landscape, as it continues full operations as a premiere hotel, gaming and top-flight entertainment hub for the city, in addition to employing more than 2,000 people. Most importantly, none of those things that make Revel among Atlantic City's highest-profile attractions will change, as Revel uses this new financial flexibility and the continued backing of its investors to grow the business and be part of Atlantic City's expansion."
David Rebuck, director of the state Division of Gaming Enforcement, said the Chapter 11 filing needs to happen. "The agreement between Revel and its lenders will allow for a necessary financial restructuring and improve the property's financial condition going forward," he said. "We see this as a positive step that will allow Revel to comprehensively address its financial needs while continuing normal business operations." It is the latest in a series of recent bankruptcies involving Atlantic City casinos. Trump Entertainment Resorts emerged in 2010 from the third Chapter 11 bankruptcy that it or its corporate predecessors had filed, and the Tropicana Casino and Resort was sold that same year out of bankruptcy court to billionaire Carl Icahn.
As part of the restructuring, some of Revel's lenders will provide approximately $250 million in debtor-in-possession financing, about $45 million of which constitutes new money commitments and approximately $205 million of which is prepetition debt. No taxpayer funds will be used to finance the restructuring, the casino said.
The company didn't identify which lenders will be part of the filing; it said only that "a majority" of its lenders have agreed.
Revel was the first new casino built in Atlantic City since the Borgata Hotel Casino & Spa opened in 2003.
It was an ambitious, risky project in a declining market. It saw itself not as a casino resort but as a resort that happened to have a casino. But the distinction seemed to have been lost on many customers, who found its restaurants and hotel rooms pricey.
The project had to overcome numerous obstacles before its opening. Three key executives working on the project died in a Minnesota plane crash in July 2008; a worker pouring concrete was struck by lightning and killed in 2011.
The project ran out of money during the recession and had to stop construction halfway through. Morgan Stanley pulled out, taking a $1.2 billion loss on the project. It only got completed with the help of state tax incentives that were approved in February 2011.
Christie-Backed Revel Atlantic City Plans Bankruptcy
By Alan Goldstein, Faris Khan & Christopher Palmeri - Feb 20, 2013
Poverty, Crime
The company had about $1.3 billion of debt and capacity to draw approximately $57.7 million of additional funds under its credit line on Sept. 28, it said in an Oct. 1 filing.Atlantic City was a bustling beach resort until the 1960s, when it became riddled with poverty, crime and corruption. The state approved casino gambling in 1976 and limited it to the city to boost its ailing finances.
The first casino, Resorts International, opened in 1978. Gambling revenue rose every year until 2007, when the 18-month recession began.
The city’s casinos have a history of debt troubles. Donald Trump’s Taj Mahal declared bankruptcy in 1990. Trump Hotels & Casino Resorts Inc. then filed for bankruptcy protection in 2004. The Tropicana filed for bankruptcy in May 2008 with $2.4 billion of debt. The Atlantic City Hilton missed an interest payment and other funding requirements on July 9, defaulting on a $348.2 million loan.
http://www.bloomberg.com/news/2013-02-20/revel-reaches-agreement-with-lenders-for-prepackaged-bankruptcy.html
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