Judge Michael Kaplan of the Trenton Bankruptcy Court said on Monday that he would give his approval for the liquidation plan that would bring the shuttered Revel casino in Atlantic City out of its Chapter 11 bankruptcy protection. According to Judge Kaplan, this would hopefully contribute to Atlantic City’s revival as one of America’s most popular gambling hubs.
During a Monday hearing, the judge referred to the property as a disaster that needs to be buried. After months of negotiations, the former owners of Revel filed last Thursday a number of settlements to the bankruptcy court. Under those settlements, the closed casino would be permitted to resolve approximately $45 million in claims for $5 million.
The 47-story hotel and casino property opened doors in 2012. Its construction cost $2.4 billion but the it never proved to be a profitable one. Last June, Revel officials filed for Chapter 11 protection for the second time. The casino was eventually shuttered in September 2014. Earlier this year, the struggling property was sold to Florida developer Glenn Straub for the amount of $82 million, thus leaving little for creditors to be repaid.
Over the past several months, Revel was in a continuing dispute with ACR Energy Partners LLC, the company that runs the casino’s custom-built plant. Under an agreement reached on Monday, ACR Energy is to be paid $3.3 million instead of the $20 million the company contended it has been owed for the utilities that the property has consumed while being under Chapter 11 bankruptcy protection.
Earlier versions of the liquidation plan had been called by ACR Energy officials quite “uncomfortable”, as the proposed money had not been enough to cover the company’s entire claim.
Under the liquidation plan, approximately $1.1 million would also be paid to unsecured creditors. Furthermore, J.P. Morgan Chase & Co, Revel’s senior lender, would receive $10 million. About $13.5 million would be set aside for various administrative costs and legal fees. The amount of $7 million would be intended for any additional administrative expenses that might occur.
A $20-million corporate business taxes claim would be settled by the state of New Jersey, which is to receive $1.65 million from the proposed budget.
Wells Fargo & Company, known to be the shuttered casino’s primary lender, would receive what is left of the property’s sale as well as several million dollars in reserve. The financial institution is owed the total amount of $150 million.
