ATLANTIC CITY — Luxor Capital Group, a New York-based hedge-fund and new majority stakeholder of Ocean Resort Casino, has petitioned gaming regulators to begin the process of being licensed by the state.
The private investment firm submitted a petition for interim casino authorization on Jan. 28, according to documents filed with the Casino Control Commission.
The filing occurred the same day the casino and hedge fund put an end to speculation about who was in control of the $2.4 billion megaresort after former principal owner Bruce Deifik announced in mid-January he would no longer be the majority stakeholder.
The interim authorization allows for temporary control of the casino after an initial investigation by the state Division of Gaming Enforcement and approval by the commission which sets the stage for a more comprehensive review before the hedge fund can be determined qualified to hold a casino license. The DGE has 90 days to complete its investigation and submit a report to the commission, which then must schedule a hearing within 30 days.
Luxor Capital and J.P. Morgan Chase Bank were primary lenders to Deifik, who purchased Ocean Resort in January 2018 for $229 million. The financing consisted of two bridge loans: $110 million from JPMorgan Chase Bank and $122.5 million from Luxor. The JPMorgan loan was repaid in June with a second loan of $175 million from the bank.
The joint petition filed by Luxor and Deifik outlines how the recently announced $70 million investment by the hedge fund will be allocated. According to the petition, $50 million of Luxor’s investment will be used to reduce the principal balance owed to J.P. Morgan. The remaining $20 million will be used to acquire a majority control of a holding company under AC Ocean Walk, the current casino licensee.
Luxor has announced its intentions to construct the long-awaited buffet at Ocean Resort, as well as finish the uncompleted 10 hotel floors in the middle of the tower, which would add an additional 600 rooms to the existing 1,399.
Following interim authorization being granted by state regulators, a trust will be created for the purpose of holding shares of the parent entity to AC Ocean Walk.
A trustee will be appointed to oversee the newly created trust after authorization is complete.
The petition identifies Eric J. Matejevich as the trustee, who at one time served as chief operating officer of the closed Atlantic Club Casino in Atlantic City.
Most recently, Matejevich was the chief financial officer for NYX Gaming Group until February 2018.