CAMDEN, N.J. A bankruptcy court judge in New Jersey has approved Revel's Chapter 11 restructuring plan, which will wipe out most of the Atlantic City casino's debt and provide new money for it to operate.
Judge Judith Wizmur in Camden gave the nod on Monday to Revel's plan to grant an 82 percent ownership stake to lenders in return for canceling $1.2 billion in debt. Revel's annual interest payments will fall from $102 million to $46 million. Money the casino used to pay toward debt will now go toward operations.
The $2.4 billion casino resort nearly wasn't completed, after Wall Street bank Morgan Stanley (MS) wrote off its $1.25 billion in the project in 2011. But New Jersey Gov. Chris Christie rescued the resort last year with $261 million in tax breaks over 20 years, support which prompted a new round of private investors to step in.
Christie's move drew fire at the time from critics who objected to state subsidies for a private company. Taxpayers in the state also accused him of hypocrisy, noting that Christie cited budgetary reasons in 2011 for canceling a popular project to build a train tunnel under the Hudson River to relieve congestion for hundreds of thousands of daily commuters.
Since Revel opened 13 months ago, it has ranked near the bottom of Atlantic City's 12 casinos in terms of the amount of money won from gamblers each month. Revel was novel on several levels, including that it bans smoking and has gambling areas with windows facing the ocean, a shift from the conventional casino practice of enclosing gamblers so it is hard to tell the time of day.
The casino could exit bankruptcy within days.