Last night’s announcement that Revel Resorts will file for Chapter 11 bankruptcy protection in March, less than a year after it opened, did not come as a surprise to many in the industry. The struggling casino resort never lived up to its billing as a potential game-changer for Atlantic City’s declining casino industry. NJ Today Managing Editor Mike Schneider spoke with Dr. Israel Posner, Executive Director of the Levenson Institute at Stockton College, to get his reaction to the news.
While there may not have been surprise at Revel’s bankruptcy filing, Posner says those in the industry are disappointed that more progress had not been made to stabilize the resort’s finances. However, Posner points out that a Chapter 11 filing does not signal the end of the casino, but a new beginning.
“This really will have almost no bearing on [the visitor] experience at Revel casino,” said Posner. “From a technical point of view, [it] represents a transfer from debt financing to more of an equitable position, so it’s really a technical restructuring of the balance sheet. What it does is it allows the casino, the property, to continue to develop as a resort and allows it to operate really in an uninterrupted way as we move into the busy summer season.”
According to Posner, the bankruptcy filing is a reflection of the confidence lenders have about Revel’s prospects.
“Theoretically, the lenders could have walked away and tried to sell the property by selling the bonds, selling control of the property, but in this particular case, they are saying we want to take a position in this property as an owner,” said Posner.
Posner says the stakes are high for Revel to get its financial house in order, not just for the 3000 people directly employed, but for everyone affiliated with the industry.
“Everybody that has a stake in this will do whatever they can to make it successful, whether it’s government, whether it’s the city,” he said. “So whether it’s too big to fail, too small to fail, it really doesn’t matter. It’s got work.”