|By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News
March 27, 2013--While its CEO made public assurances that it had sufficient liquidity to make it through 2013, the debtors of the lavish but flagging Revel casino in Atlantic City scrambled to arrange a bankruptcy filing.
The burden of servicing $1.5 billion in debt, amid dismal revenue, was simply too heavy, according to the 390-page petition filed by owner Revel AC Inc. late Monday in U.S. Bankruptcy Court in Camden.
On Page 13 of the voluminous petition, the debtors listed four ways they hoped to improve business: Add a high-end slots area, a new and less-expensive food court, a semi-private VIP players' lounge, and not least, a smoking area.
The $2.4 billion Revel -- built with $300 million in state assistance -- entered the New Jersey gaming scene with high hopes. The petition outlined the plan: "[The] operating strategy was to create a more balanced business model than currently exists in Atlantic City, minimizing economic dependence on the traditional gaming customer and increasing its focus on the cash or resort customer."
But the traditional customer who gambles -- and more often than not, smokes as well -- ultimately doomed Revel, say critics. Revel's revenue was among the weakest of Atlantic City's casinos every month since it debuted on April 2, 2012.
The petition outlines the reorganization plan, which seeks to eliminate about $1 billion of Revel's debt in a debt-for-equity swap. Creditors have agreed to the arrangement, according to the filing.
Kevin DeSanctis resigned earlier this month, and in his place is interim CEO Jeffrey Hartmann. The bankruptcy petition details the vast gap between DeSanctis's public pronouncements and the creditors' increasing angst over the casino's performance.
After December casino revenue figures were released, and Revel placed 10th among A.C.'s dozen gambling halls, at $9.9 million, DeSanctis projected optimism.
"We have an exciting year planned, and we are confident that our guests will enjoy the positive changes taking place," he said.
When January figures came out, and Revel's revenue was just under $8 million from slot and table games, placing it second to last, DeSanctis remained upbeat.
"We have just begun re-introducing Revel to the gaming customer," he said on Feb. 11. "We continue to improve our overall amenities."
But Revel's gaming revenue did not. It finished 10th in February at $9 million.
On Feb. 17, the debtors' board of directors authorized the appointment of Dennis E. Stogsdill, restructuring adviser at Alvarez and Marsal North America, L.L.C., in New York to become chief restructuring officer of the debtors, and oversee a Chapter 11 filing.
Two days later, Revel announced it was filing a prepackaged bankruptcy.
Contact Suzette Parmley at 215-854-2855 or email@example.com.
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