Dec. 16–The bankrupt Atlantic Club Casino Hotel in Atlantic City is on a fast track to be sold this week.
Bids are due Monday by 4 p.m., an auction for bidders is scheduled for 11 a.m. Tuesday, and a hearing to approve the sale is on the slate for Thursday.
It’s not clear how many bidders, if any, will emerge for the Atlantic Club, which has been owned by a California private equity firm since 2005 and has been for sale since at least 2011.
Since the Nov. 6 bankruptcy filing, the company’s investment bankers have failed to line up a so-called stalking-horse bidder, which would have set a minimum price in the auction.
Bids are due Monday afternoon at a law firm in Hackensack, N.J., but a scheduled morning hearing in Camden will deal with a hotly contested incentive plan for seven Atlantic Club executives that would pay them, in aggregate, between $875,000 and $2.1 million, depending on the sales price.
The Atlantic Club would have to sell for at least $25 million for the minimum payout to executives to kick in under the “key employee incentive plan.”
The United States trustee overseeing the bankruptcy, the Official Committee of Unsecured Creditors, and a company that owns a $5.7 million tax lien on the Atlantic Club objected to the incentive plan, which claims the managers are needed to enhance the value of the sale.
“The debtors’ sales process began long before the bankruptcy was filed and is scheduled to conclude with a sale hearing on Dec. 19. There is nothing at this late date that the debtors’ management can do to create value,” Richard M. Beck, an attorney with Klehr Harrison Harvey Branzberg L.L.P. representing unsecured creditors, said in a filing Friday.
Atlantic Club’s attorneys filed their response under seal late Friday afternoon.
An executive with Mercer Inc., designer of the incentive plan, said the $25 million threshold was a good target because it was $10 million more than a $15 million deal with PokerStars that fell apart this year.
That deal, however, was strictly for the casino’s equity, leaving PokerStars with the property’s debt.
Beck said that deal is not comparable to the planned bankruptcy sale, which would be “free and clear of all liens, claims, and encumbrances.”
hbrubaker@phillynews.com
215-854-4651 @InqBrubaker
