By Lauren Wanko
It’s the newest resort in Atlantic City and less then year since Revel opened its doors, it will file a voluntary, prepackaged Chapter 11 bankruptcy. With next month’s anticipated court filing, Revel says it’s reached an agreement with the majority of its vendors and the resort’s debt load will be reduced by more than $1 billion through an exchange of debt for equity.
A Revel spokesperson was not available today for an on-camera interview. In a statement Revel says, “As part of the restructuring, certain of Revel’s lenders will provide approximately $250 million in debtor-in-possession financing (DIP), approximately $45 million of which constitutes new money commitments and approximately $205 million of which constitutes pre-petition debt. No taxpayer funds will be used to refinance the restructuring.”
Revel intends to continue normal business operations. There have been no discussions on management changes and the resort says guests, employees and vendors won’t be impacted. Assemblyman John Amodeo says it’s good news for Atlantic City.
“Revel’s gonna stay open,” Amodeo said. “I’m proud over the fact the investors realized that this is a good investment here in Atlantic City, by them calling in their warrants and taking that equity share and being owners in that property and letting the management do what they feel is best for that property shows that that interest is here in Atlantic City.”
But others aren’t as optimistic.
“They never should have built this casino to begin with. I understand they needed to build this casino because they needed rooms on the weekend. The place is empty during the week. I don’t feel sorry for them,” said Fern Rashkover of Douglaston, N.Y.
Gov. Chris Christie has been a vocal supporter of the resort.
“Folks should understand that this is something that happens at times in business. Certainly the events in the state over the last number of months hasn’t helped in terms of the traffic that’s happened in Atlantic City in the aftermath of the storm,” Christie said. “The fact is that we still stand ready to support Revel when Revel becomes profitable.”
The more than $2 billion resort opened in April. Casino executives and other officials counted on the mega resort to help transform Atlantic City into a destination family-friendly resort getaway.
“I don’t see it so family friendly. Quite frankly I don’t think this is a place for kids,” Rashkover said.
“For their prices, someone in the winter time, I was saying if I was going to spend the money that it would cost to spend a week here, I’d be in the Caribbean,” said Jeannie Ellsworth of Queens, N.Y.
Since it’s grand opening, Revel executives stressed they would focus less on gaming and more on the resort experience but critics insist Revel needs a shift in their business strategy.
“They seem to be catering to a very exclusive club,” Ellsworth said. “I don’t think it’s catering to people who are going to put money in their slot machines so they can make some money.”
A company spokesperson says Revel is focused on continuing to execute on its business plan throughout the restructuring process. Revel says they expect to complete the restructuring by early summer.