Revel again files for bankruptcy, warns employees it could close this summer
ATLANTIC CITY — Revel Casino Hotel warned its employees Thursday that it could close as early as mid-August if the ailing megaresort cannot find a buyer. The announcement came as Revel entered chapter 11 bankruptcy for the second time in nearly 15 months.
Revel President Scott Kreeger told employees in a legally required notice that Revel Entertainment Group is “seeking to sell Revel to a new owner who we anticipate would have the ability to provide the funding and long-term commitment to help Revel reach its full potential.” The bankruptcy proceedings aim to facilitate that sale.
But if one doesn’t emerge, he said he expects all of Revel’s nearly 3,200 employees to lose their jobs by Sept. 1.
Normal business operations will continue during this second round of bankruptcy proceedings, he said.
Payment of wages will continue uninterrupted and reservations will be honored, according to a company statement.
Matthew Levinson, chairman of the Casino Control Commission, said he’s optimistic Revel will find a buyer “who can take over the property and succeed going forward,” noting that “Revel has arranged adequate financing to maintain its day-to-day operations,”
“Once a new owner is identified through the court process, the commission is prepared to act expeditiously on any approvals that may be necessary,” he said.
Bob McDevitt, president of the UNITE Here Local 54 union, which represents about 1,000 Revel employees, hopes that can happen. “"We believe a sale of Revel to a buyer who wants to keep the property open and retain the employees is the best thing for the workers, for Atlantic City and for Revel, and Local 54 is committed to working with all parties to save the jobs," he said.
But there’s no two ways about it, said state Sen. Jim Whelan: “It’s not a good day for Atlantic City.”
“I feel very badly for everyone involved who (is) going to have to live with this hanging over their head,” he said. “It has not worked out the way all of us have hoped.”
The ill-starred casino has had financial troubles since opening to huge fanfare in April 2012.
Wall Street analysts predicted at the time that Revel would strain under more than a billion dollars of debt it racked up during construction. But Revel executives insisted that the sheer grandeur of the posh, 6.2 million-square-foot facility would attract throngs of visitors and make the project viable.
That didn’t happen.
Flagging revenue and crushing debt caused huge losses. By March 2013, Revel was bankrupt.
It emerged from Chapter 11 bankruptcy two months later, having shed much of its debt by selling lenders a huge stake in the operation.
Revel was initially billed as a glitzy resort featuring upscale restaurants run by Iron chefs, a swank 5,000-seat theater and 1,900 high-end hotel rooms. By the end of 2013, it had rebranded under the slogan “Gamblers Wanted” and was being promoted as an affordable casino that offered low-cost food options, such as a $9.99 steak-and-shrimp special.
But the strategy wasn’t enough to heal the ailing casino, and Revel continued to struggle, posting a $21.7 million loss for the quarter ending March 31.
The conditional notice of layoff sent to employees was provided to satisfy legal requirements of the federal Worker Adjustment and Retraining Notification Act.
The letter said the sale is not guaranteed and the casino is considering all alternatives. “If Revel is unable to complete such a sale promptly, Revel expects to close its entire facility located at 500 Boardwalk, Atlantic City, New Jersey, on a permanent basis and, in connection therewith, to terminate all employees during the period between August 18, 2014 and September 1, 2014.”
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