Nov. 12–The Atlantic Club Casino Hotel _ the only one of Atlantic City’s 12 casinos to experience an increase in revenue in September _ announced Thursday that it has filed for Chapter 11 protection in U.S. Bankruptcy Court.
The casino released a statement saying that the filing was necessary “to facilitate an expedited sale while the property continues to operate in the ordinary course of business.”
The Atlantic Club, which opened in 1980 as the Golden Nugget and later became the Atlantic City Hilton, has produced better revenue numbers than its competitors in the past year as it rebranded itself as the go-to destination for locals and modest bettors. Its September revenues of $12.3 million were up 3.9 percent from 2012, but the casino still ranked only ninth in revenues for the month.
One of the bankruptcy filings lists the casino as having total assets of $46 million and total liabilities of $38 million, with more than 2,000 creditors.
The casino, owned by an affiliate of Colony Capital _ the Los Angeles-based real estate investment firm that replaced Mills Corp. as the Meadowlands Xanadu developer in 2006 only to be ousted by a project lending group in 2010 _ seemed to have found a savior last December when PokerStars reached a preliminary deal to take over the property. PokerStars agreed to pay $15 million for the struggling property and to invest nearly $2 million per month to keep the casino afloat over the winter.
But casino operators ousted the Isle of Man-based online poker company in April after receiving $11 million in financial aid from PokerStars, citing an opt-out clause in their contract. A judge sided with the casino, and in August, PokerStars announced it would seek state approval to partner with Resorts Casino Hotel in Atlantic City in offering online gaming when the state debuts those offerings on Nov. 26. The Atlantic Club and Revel are the only two casinos in the state not to announce a partnership with an online gaming partner.
The Atlantic Club is the sixth New Jersey casino _ all of which are in Atlantic City _ to file Chapter 11 since 2007, and overall revenues are down more than 40 percent in that span. Governor Christie signed the online gaming bill into law in February _ with the support of the casinos _ as one of numerous measures designed to help the state casino industry rebound. The state also is in court seeking to overturn a 21-year-old federal law that so far has invalidated the state’s year-old law that would allow sports betting at the casinos as well as state racetracks.
“We believe in our property’s positioning and the value-centric niche we committed to nearly 18 months ago,” said Michael Frawley, the chief operating officer of The Atlantic Club. “Unfortunately, the market has taken longer to rebound than we had hoped. We have ample funding to carry us through this process, and anticipate a seamless transition for our employees and guests.”
Matthew Levinson, chairman of the Casino Control Commission, said in a statement that the state agency “has been monitoring Atlantic Club’s financial situation for some time.”
“As has happened in the past, I expect that The Atlantic Club will continue to operate just as it has been operating,” Levinson said.
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