Atlantic Club Casino Hotel is carrying assets of $17.8 million against liabilities of at least $16.8 million as it moves toward an auction later this month, documents filed this week show. Liabilities at the Atlantic City property, formerly the Atlantic City Hilton Casino Resort, are likely more significant when an employee pension plan is factored into financial equations.
The filings, made as part of federal bankruptcy proceedings, reveal new details about the casino’s financial position and the state of its operations. It is expected to be sold at auction later this month.
Assets do not include the value of the property, which the company listed as “unknown.”
The company’s pension plan is included in a list of known creditors. That debt is listed as “unknown,” but is likely Atlantic Club's largest liability. Court documents from an unrelated case filed earlier this year by PokerStars stated that Atlantic Club is facing more than $30 million in pension liabilities.
The newest filings also detail three environmental violations against the casino and an accident involving a water pipe this summer that resulted in nearly $780,000 in damage to the property.
Atlantic Club filed for Chapter 11 bankruptcy in November after a deal to sell the property to online gaming giant PokerStars collapsed earlier this year. PokerStars had been supplementing Atlantic Club's operating shortfalls by $750,000 per week in anticipation of a sale that never materialized. A New Jersey Superior Court judge later ruled that Atlantic Club could keep the $11 million it had collected from PokerStars and walk away from the deal.
A statement of assets and liabilities filed Wednesday shows that the property has hundreds of creditors who are owed amounts ranging from millions to just $25. Among the debt is $2.3 million owed to the city of Atlantic City, $35,352 to KGM Gaming, a Philadelphia-based casino supplier, $14,822 to Atlantic City's Ginsburg Bakery, and $8,448 to Atlantic City's Formica Brothers Bakery.
Other large creditors include Bally Gaming, which is owed $722,654, and Atlantic City Electric, which is owed $435,897. Atlantic Club has $2.5 million outstanding in accounts receivable.
According to court documents, Atlantic Club saw severe water damage resulting from an accident June 18. A pipe burst during a storm, causing water damage to several of the casino's restaurants, a second-floor hallway in the hotel, portions of the casino floor, and areas of the information technology department.
Repairs from the incident totaled $789,039, of which insurance paid $708,414 and is withholding another $85,000, the documents state. Atlantic Club was required to disclose the accident in a list of losses within the past year.
Also listed are any potential violations of environmental law in which the company could be found liable. Most recently, Atlantic Club was noticed Jan. 2 and Jan. 9 for violations involving the removal of hazardous waste from the property. The violation was settled with the New Jersey Department of Environmental Protection in August for an undisclosed amount. No other information regarding the incidents was immediately available.
Atlantic Club has been owned since 2005 by Resorts International Holdings, an affiliate of the California-based private real-estate investment firm, Colony Capital LLC.
A court schedule requires prospective buyers to bid on the property by Dec. 16, with the offers accepted in court the following day. The deal with PokerStars, based on the Isle of Man, would have seen the property sold for $15 million, a record low in the Atlantic City market. The deal would have been the first instance of an online gambling company purchasing a land-based casino in the United States.
Bankruptcy documents also required Atlantic Club to list who has had access to company financials. The list of several dozen people includes several individuals from PokerStars, New York City-based AREA Property Partners, and Vincent Crandon, managing director of financial firm MidOil USA. Crandon is representing an investment group including 2UP Gaming PLC, which had expressed interest in purchasing an Atlantic City casino. He last accessed the company's financials Nov. 25, documents show.
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