Five entities with a stake in land where the ambitious Las Vegas W hotel was supposed to be built filed for bankruptcy in Nevada on Wednesday, Dow Jones Daily Bankruptcy Review reported today. In filings with U.S. Bankruptcy Court in Las Vegas, the five businesses listed assets of between $100 million and $500 million and liabilities of between $500 million and $1 billion.
Atlantic City's bankrupt Revel Casino Hotel has received court approval to borrow $23.9 million that it said would keep the 1,400-room resort operating for the coming month as it scrambles to find a buyer, Reuters reported on Friday. Revel filed for chapter 11 protection on Thursday afternoon and rushed to court early on Friday for a slew of court orders that it said were vital to pay its 3,140 employees, soothe nervous vendors and honor programs that provide gamblers with key perks. "The reality of the Revel situation today is that Revel has lost this year alone $75 million," John Cunningham, a White & Case attorney who represents the casino, told Judge Gloria Burns. "Even in peak summer season, Revel loses $2 million a week and relies on borrowed funds." The loan is being provided by a unit of Wells Fargo, a creditor of the hotel, and Revel will return to court on July 11 and could seek to increase the amount it borrows to $41.9 million.
Atlantic City’s Revel Casino Hotel warned its staff yesterday that it will shut down this summer if a buyer can’t be found in bankruptcy court, the Asbury (N.J.) Park Press reported today. Revel said that it is seeking a buyer for the struggling $2.4 billion casino, but can’t guarantee one will be found. If not, employees could be terminated as soon as Aug. 18, Revel said in the letter. The company also said that it plans to stay open while it searches for a buyer, operating as usual, honoring player comps and paying employees and vendors. Shortly after distributing the letters, Revel filed a chapter 11 petition with the federal bankruptcy court, its second in as many years. The casino said that it hopes to find a buyer quickly.
With debt-laden gaming giant Caesars widely expected to undergo restructuring, current bondholders may see their future negotiating power being seriously weakened, Reuters reported on Friday. The corporate parent's guarantee behind bonds issued by the opco, Caesars Entertainment Operating Company, is expected to be removed under a credit agreement amendment. Analysts say this would significantly weaken the position of current bondholders when CEOC, which is operating under nearly $18 billion in debt, heads to restructuring. Private equity firms Apollo and TPG acquired Caesars in a 2008 leveraged buyout, leaving the company with a large amount debt — and more is on the way. CEOC plans to raise an additional $1.75 billion in a new first-lien term loan, which will repay more than $1 billion of 2015 bond maturities if investors tender the debt, as well as some existing bank loans.
The partnership behind the failed Foxwoods Casino project in South Philadelphia filed Monday for bankruptcy court protection, citing claims of $23.6 million from 14 creditors, Philly.com reported today. In addition, Citizens Bank, the largest creditor, is owed an unspecified amount, according to the court petition. The partnership last week sold its largest asset, a vacant 16.5-acre lot on South Columbus Boulevard between Tasker and Reed Streets. The property was transferred to developer Bart Blatstein for $13 million. Of the proceeds, $8 million went to the City of Philadelphia to settle a tax bill.
A bankrupt British Virgin Islands luxury resort owner was assailed by lender FirstBank Puerto Rico for an allegedly “false and misleading” court filing saying a settlement had been reached over the bank’s claims, Bloomberg News reported today. The resort owner, Scrub Island Development Group Ltd., filed a restructuring proposal on Wednesday in U.S. Bankruptcy Court in Tampa, Fla., saying that it had an agreement with FirstBank on the treatment of almost $120 million in claims. The statements in the proposed reorganization plan and an accompanying explanatory disclosure statement are “completely false and misleading” and the bank “never agreed to the terms of this nature,” said Lawrence Odell, FirstBank’s general counsel. FirstBank filed an initial objection to the plan making similar statements. Under the proposed plan as filed by Scrub Island, the bank would get a new claim of $37.5 million against the reorganized company, which would be reduced to $30 million with an initial cash payment and then paid over five years. FirstBank would get $84.9 million in unsecured deficiency claims that would receive no recovery.
The Atlantic Club casino next month will be stripped for parts and sold to two larger competitors, the Reno Gazette Journal reported on Saturday. Two companies with casinos in Atlantic City, Tropicana Entertainment and Caesars Entertainment, will pay a combined $23.4 million for the business. According to bankruptcy filings made on Friday afternoon, Tropicana will take the 1,641 slot machines and 48 table games for $8.4 million, while Caesars will get the property and its more than 800 hotel rooms for $15 million. A judge must approve the buyers at a hearing Monday.
The owner of the Scrub Island resort in the British Virgin Islands is fighting its lender to use U.S. bankruptcy protection to rework its more than $130 million worth of debt, the Wall Street Journal reported today. Lawyers for Scrub Island Resort, Spa & Marina's owner said that bank officials shouldn't win their request to dismiss the resort's bankruptcy case, which was filed on Nov. 19 in U.S. Bankruptcy Court in Tampa, Fla., because of the resort's location in the Caribbean sea. In court papers, the resort owner's lawyers said that its headquarters have been located in Tampa since 2005 and that it uses U.S. bank accounts to pay some of its 140 workers. Last month, FirstBank Puerto Rico officials who said they're owed $120 million from the resort owner asked Judge Michael G. Williamson to throw out the bankruptcy case, which has gotten in the way of its attempt to foreclose on the 230-acre island and its 53-room resort.
Scrub Island Development Group Ltd., the owner of a British Virgin Islands luxury resort, sought bankruptcy protection to end a receivership it claims was secretly put in place by its lender, Bloomberg News reported yesterday. The company listed debt and assets of more than $100 million each in chapter 11 documents filed on Tuesday. FirstBank Puerto Rico, the company’s lender, is owed about $108 million, according to court documents. FirstBank initiated a “highly secretive appointment” of a temporary receiver of the Scrub Island Development Group’s assets without prior notice to the company or its lawyers, the resort operator said in court papers. The bank’s request was granted on Nov. 1 by the Eastern Caribbean Supreme Court in the High Court of Justice, according to court documents. FirstBank can seek an extension of the court’s ruling at a Nov. 28 hearing, the day after the temporary receivership is set to expire.
Revel AC Inc. said that it is exploring strategic options, such as a possible sale, and restructuring its loans, six months after the $2.6 billion Atlantic City casino emerged from bankruptcy, Bloomberg News reported on Friday. The New Jersey casino, owned by investors who took over in May, has not decided on any specific deal and can’t be certain one will occur. The company also said that it obtained $75 million in additional financing. Once owned by Morgan Stanley, the Revel Casino Hotel opened last year with the New Jersey resort city’s casinos in a downward spiral, buffeted by competition from neighboring states, the lingering effects of nationwide drop in gambling and later hurricane Sandy. Revel filed for chapter 11 protection in March, 11 months after opening.