Nov. 19–CAMDEN — The owners of the Atlantic Club Casino Hotel said they plan to accept bids on the bankrupt casino next month and close the deal in late February or early March. Prospective buyers would make bids by Dec. 16, attorney Michael D. Sirota said in the hearing in federal bankruptcy court. The offers would be accepted Dec. 17, and a hearing to ratify any agreement would be held in front of federal Chief Judge Gloria M. Burns on Dec. 19.
The actual closing would take place in early 2014, said Sirota, depending on the speed of state regulatory approvals. Sirota, of Cole, Schotz, Meisel, Foreman and Leonard of Hackensack, represented RIH Acquisitions NJ LLC, the owners of the Atlantic Club.
“We are hopeful competitive bidders will want to participate,” Sirota said in court.
Sirota also asked Burns to conceptually permit a stalking-horse arrangement, where a company is allowed to make a minimum bid, essentially providing insurance against low-ball offers.
He said Northlight Financial LLC would be excluded from stalking-horse status. The casino has financed the bankruptcy with a $15 million loan from a Northlight affiliate.
Burns agreed, setting a Dec. 10 deadline and a Dec. 11 hearing to come to an agreement on the details.
“I don’t know if having a stalking horse will help,” she said, “but it certainly can’t hurt.”
The hearing came less than two weeks after the casino filed for Chapter 11 bankruptcy protection, seeking to reorganize its finances while it stayed open for business. It is the resort’s second casino, after Revel, to file for Chapter 11 protection in 2013.
Documents filed in U.S. Bankruptcy Court list 219 pages of creditors and acknowledge the company owed a collective $6.4 million to 19 of its 20 largest creditors.
It lists as unknown its largest debt, pension expenses with the National Retirement Fund of Lincoln, R.I. Unrelated court records have indicated the company has more than $30 million in unfunded pension liabilities.
When it filed, the company estimated between $10 million and $50 million of both assets and liabilities.
The casino has lost more than $7 million in the first nine months of the year, despite an 11 percent rise in gambling revenue.
The casino was valued at $513 million when Colony Capital LLC bought it in 2005 as part of a $1.2 billion deal that included four casinos in New Jersey, Mississippi and Indiana.
The casino has been on the market on and off since January 2011, Sirota said in court Monday. During that time, he said five separate entities he did not name have expressed interest in the casino. Talks with two of the entities, he said, got to the point of exclusivity agreements before breaking down.
The online gambling company PokerStars offered $15 million for the property earlier this year. The deal fell apart when Atlantic Club backed out. PokerStars had been underwriting the casino’s losses for months, and sued to maintain the arrangement.
Instead, a Superior Court judge ruled the casino could keep $11 million that had already been paid toward the purchase price. PokerStars has appealed.
Once the PokerStars deal fell apart, Sirota said the casino “tried to aggressively market to alternative buyers” to no avail.
Contact Derek Harper:
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