Revel has reached a deal with Atlantic City officials to lower its tax assessment to about half of the $2.4 billion it took to build the megaresort, lawyers said Thursday in U.S. Bankruptcy Court in Camden.
The $1.15 billion tax assessment will be locked for three years, from 2013 to 2015, lawyers said. In return, Revel agreed to pay two prior years of property taxes based on the city’s assessments of $820 million in 2011 and $1.5 billion in 2012, lawyers said.
The deal will allow Revel to move forward with its restructuring plans without worrying about a court battle with the city, Revel’s lawyer Chris Greco told Judge Judith Wizmur during the bankruptcy hearing.
“We think it’s a good result,” Greco said. “It eliminated the uncertainty with litigating with the city.”
Revel is moving closer to emerging from bankruptcy protection, also receiving final approval during the hearing to obtain about $40 million in new loans to tide it over for another few months until a new round of financing can be finalized and the restructuring plans can be confirmed.
“We look forward to emerging from this process positioned for long-term success with a right-sized balance sheet, greater casino floor appeal and the ability to continue providing our guests with a personalized Revel experience,” interim CEO Jeffrey Hartmann said in a statement.
The megaresort, which opened in April 2012, is seeking to eliminate much of the $1.5 billion in debt it owes by converting about $1 billion into an equity stake for creditors.
All of the creditors who voted on the prepackaged bankruptcy plan cast ballots in favor of the proposal, lawyers said.
“That underscores the widespread support,” Revel lawyer Marc Kieselstein said.
Few objections have been filed in connection with the prepackaged bankruptcy, primarily because Revel has said it intends to eventually pay vendors and unsecured creditors, especially once it emerges from bankruptcy protection and receives the additional financing.
One vendor, IGT, which said it is owed $20 million for equipment at Revel, did cast an objection to a provision in the bankruptcy document that might leave IGT with no means to recoup its claim in the event the judge does not confirm the restructuring plan and creditors proceed to liquidate Revel.
But Wizmur ruled against the objection, saying Revel submitted the necessary documents showing the provision was crucial to Revel's deal with creditors, and even if the restructuring fell through, IGT’s claim would remain the same.
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