The failing Atlantic City casino, Revel has now filed its voluntary pre-packaged Chapter 11 cases in the US Bankruptcy Court for the District of New Jersey (Camden) to commence its previously announced financial restructuring.
Under the plan of reorganisation, Revel will significantly reduce its debt by more than 82 per cent from approximately $1.52bn to $272m, through a debt-for-equity conversion. It has secured votes from a supermajority of its lenders, which is in excess of the amount required for the court to approve the plan.
The restructuring is not expected to impact Revel’s guests, employees or vendors. Throughout the restructuring, Revel intends to continue normal business operations. All services, guest loyalty plans and promotions, dining, scheduled entertainment, programming and events will continue to move forward without change or interruption, and that employees and vendors will be paid in the normal course of business.
Jeffrey Hartmann, Revel’s Interim Chief Executive Officer, said: “Backed by overwhelming lender support, we remain on track to complete our financial restructuring ahead of the critical summer season. We will emerge from this recapitalization positioned for long-term success, with the financial capacity to pursue our amenity enhancement opportunities, and the ability to continue providing our guests with a signature Revel experience.”
As previously announced, Revel’s lenders will provide US$250m in debtor-in-possession financing (DIP), approximately $42m of which constitutes new money commitments and approximately $208m of which constitutes prepetition debt.
Revel recently found new roles for the top executives who developed and opened the resort casino with Chief Executive Kevin DeSanctis and Chief Investment Officer Michael Garrity stepping down as the casino’s operators. The two retained management and ownership of a separate entity, called Revel Group, which will retain ownership of the Revel brand and continue to license out the Revel name but will no longer own the casino itself.
Rather than revamp a failing market, Revel has become an unfortunate symbol of Atlantic City’s continuing woes. It opened to great publicity in April 2012 but has lost money since and has needed bailouts from investors several times.