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Bloomberg: Christie-Backed Revel Atlantic City Plans Bankruptcy

February 20, 2013, 07:39 AM
Filed Under: Bankruptcy

Revel AC Inc., the casino owner that New Jersey Governor Chris Christie bet on to revive Atlantic City, plans to file for a prepackaged bankruptcy that will reduce its debt burden by more than $1 billion.

Certain Revel lenders will provide about $250 million in debtor-in-possession financing, including $45 million of new loans, the company said yesterday in a statement. No taxpayer money will be used to finance the restructuring, Revel said.

Revel, Atlantic City’s first new casino since 2003, opened in April at a cost of $2.6 billion with the help of Christie, who helped restart the project after Morgan Stanley abandoned construction. An attempt to bring higher-end customers to the seaside city, Revel has struggled to attract business, suffering an added setback when Hurricane Sandy forced its closure for five days starting Oct. 28. New Jersey, faced with regional competition, saw its total gambling revenue fall 8 percent to $3 billion in 2012, the sixth year of declines.

Govenor Christie stepped in after Morgan Stanley walked away from the beachfront project in 2010, halting funding on what was conceived as the city’s biggest resort and writing off most of its $1.2 billion investment.

Lenders that include Canyon Capital Advisors LLC, Capital Research & Management Co. and Chatham Asset Management LLC will own most of the equity once Revel emerges from bankruptcy protection, the Wall Street Journal reported, citing people familiar with the matter.

View Revel’s press release issued February 20, 2013.

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