Revel, a lavish Atlantic City casino that opened significantly less than a year ago, filed for bankruptcy protection late on Monday under a strategy that would turn more than control to lenders and remove more than $1 billion of debt.
The Chapter 11 filing, which was anticipated, culminates a rapid decline for a complicated that cost $2.four billion to make and had been anticipated to bringing Las Vegas-style glitz to a city where gambling revenue had fallen for several years.
Under the plan, Revel will slash its debt to $272 million from about $1.52 billion by way of a debt-for-equity conversion. The plan has secured greater than the amount of lenders’ votes required for the court to approve it, Revel added.
“Backed by overwhelming lender support, we remain on track to complete our economic restructuring ahead of your essential summer season,” Jeffrey Hartmann, Revel’s interim CEO, mentioned within a statement.
Revel expects to continue regular business operations throughout the restructuring. Lenders include things like Canyon Capital Advisors and Chatham Asset Management, and they are expected to become owners after it emerges from bankruptcy by June or July.
Positioned close to the northern finish of Atlantic City’s boardwalk, Revel’s wave-shaped complex opened on April 2, 2011. It involves a 1,800-room hotel, theaters, nightclubs and 14 restaurants, some helmed by celebrity chefs such as Michel Richard.
Its vast casino has greater than 2,400 slot machines and almost one hundred table games.
Morgan Stanley initially owned most of Revel Entertainment Group LLC, which started developing the casino, but sold its stake at a $932 million loss in February 2011 to investors led by Kevin DeSanctis. The new owners then obtained a tax package of roughly $261 million from New Jersey and lined up $1.15 billion of financing to assist full the project.
DeSanctis resigned earlier this month as Revel’s chief executive. Hartmann, the interim chief executive, is a former chief executive with the Mohegan Sun casino in eastern Connecticut and has more than 20 years of practical experience in the gaming business.
Backers had hoped Revel would come to be the next Borgata, a joint venture amongst Boyd Gaming Corp and MGM Resorts International that opened in 2003 and became Atlantic City’s top-grossing casino.
Atlantic City, nonetheless, has lost its appeal and final year, the adjacent state of Pennsylvania overtook it to become the second-largest U.S. gambling marketplace just after Las Vegas.
The case is Revel AC Inc, Case No. 13-16253, U.S. Bankruptcy Court, District of New Jersey.