Last month the company that owns Revel, the Atlantic City casino, announced that it would be filing for a voluntary Chapter 11 bankruptcy. The casino will remain opened while it works out a recovery plan.
As part of the bankruptcy process, Revel reportedly plans to convert $1.5 billion in debt into $1 billion in equity for its creditors.
In a news conference in Little Ferry, NJ governor Chris Christie said that he and Revel’s investors are confident in Revel’s future.
They’re investing in Atlantic City. If they thought that there was no future there, they could close Revel down. Instead they’re taking debt that they’re owed legally and turning it into ownership. That’s an investment by these folks in that hotel.
Chapter 11 bankruptcy, also known as reorganization, is frequently filed by businesses with large debts. In most of these cases, the debtor maintains control of business operations and is subject to jurisdiction by the court.
The bankruptcy is not a huge surprise, as Revel is the most expensive casino ever built in New Jersey. Since it opened last April, the casino has not seen as much revenue as many other casinos in the area.
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