New Jersey Casino, Revel, said it will file for bankruptcy after being open for just one year. The $2.4 billion Atlantic City casino accumulated $1.5 billion in debt and was failing to turn a profit.
The voluntary Chapter 11 bankruptcy protection will be processed in late March and will convert $1 billion of its debt into equity for lenders. Construction for the casino was first stalled for a time after Morgan Stanley abandoned the project. Then New Jersey Gov. Chris Christie stepped in and helped the project to the finish line, with a push for $261 million in tax incentives from the state Economic Development Authority, Newsmax reported.
"My vision for Atlantic City is that Atlantic City needs to become Las Vegas East," Mr. Christie said in a 2011 report from Bloomberg. Revel was the first new casino built in Atlantic City since the Borgata Hotel Casino & Spa opened in 2003.
Kevin DeSanctis, Revel's CEO, said the restructuring will give the casino resort more flexibility to operate, calling it "a positive step for Revel."
"The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility," he said.
Hurricane Sandy also showed a dip in revenue as the casino was forced to close for five days.
"We've been saying for a long time there are some problems with this company," said Ben Begleiter, a research analyst with the labor union Unite-HERE. "Our hope is that they use this as an opportunity to take a look from top to bottom and make changes that are good for the company, the workers and Atlantic City."