NJ judge OKs Revel's bankruptcy financial plan

NJ judge OKs Revel casino's temporary financial plan as it moves toward Chapter 11 exit in May

Associated Press
NJ judge OKs Revel's bankruptcy financial plan
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Revel, Atlantic City's newest casino shown here on April 8, 2013, laid off 83 employees on April 17, 2013. The $2.4 billion resort is in bankruptcy court. (AP Photo/Wayne Parry)

CAMDEN, N.J. (AP) -- Revel is having much more success in bankruptcy court than it is at the slot machines and card tables.

A bankruptcy court judge on Thursday gave final approval to a $250 million temporary financing plan designed to keep the casino doors open and the dice rolling. Judge Judith Wizmur approved a "debtor-in-possession" plan allowing Revel to continue operations while it is under Chapter 11 protection and sped it on its way toward an expected exit next month from bankruptcy court.

"We are very pleased with the progress of the case, and we're looking forward to exiting from bankruptcy in mid-May," said Dennis Stogsdill, Revel's chief restructuring officer.

The $250 million financing plan lets the casino pay employees, buy supplies, continue player loyalty programs and pay taxes and utility bills, among other things.

The judge gave preliminary approval to the plan last month. With little opposition having been voiced by creditors since then, the judge made her approval final Thursday.

She still must rule on the heart of Revel's turnaround plan: eliminating 82 percent of its $1.5 billion debt by converting most of it into equity for lenders. The judge is scheduled to consider that plan at a hearing May 13.

Revel also announced Thursday that it has reached a settlement with Atlantic City over back and future taxes on the resort, which cost $2.4 billion to build. The compromise plan assessed Revel at a higher rate than its owners say it's worth but lower than the rate Atlantic City sought.

In filings with securities regulators in March, Revel said that it was worth no more than $450 million and that it could take four years to become fully profitable.

Chris Greco, an attorney for the casino, said Revel and Atlantic City had differed on how much the property should be assessed at for tax purposes. The 2011 assessment was $820 million, and the 2012 assessment, reflecting the casino's opening in April of that year, was $1.47 billion — a figure Atlantic City had wanted to increase to $1.8 billion.

Revel appealed that decision, and both sides worked out a deal under which tax assessments for 2011 and 2012 will remain at their original levels, and the assessments for 2013 through 2015 will be set at $1.15 billion per year.

Greco said the settlement helps Revel because had the deal not been reached, the casino would have had to pay the higher tax rate while disputing it in court and seeking a refund that could have taken years to materialize.

Revel's bankruptcy filing lists $1.1 billion in assets and $1.5 billion in liabilities.

It posted a $110 million operating loss from its April 2, 2012, opening through the end of last year, and on Wednesday, it laid off 83 employees as it works to shed expenses and become profitable.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC

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