U.S. Bankruptcy Court Judge Judith H. Wizmur on May 13 signed off on Revel AC, Inc.’s plan to exit bankruptcy — a plan that will cut more than $1 billion in debt for the gambling company, which first announced its pre-packaged bankruptcy March 25.
Judge Wizmur, who also oversaw the 2009 bankruptcy of Atlantic City casino Trump Entertainment Resorts, Inc., approved the bankruptcy plan, which allows the struggling casino to reduce its debt from approximately $1.52 billion to about $272 million in a debt-for-equity conversion. The basic framework of the plan refinances $193 million in loans by rolling them into bankruptcy financing.
Lenders owed approximately $921.2 million will receive 100 percent equity in the new company. Unsecured creditors are being paid in full, and current equity holders will be wiped out. Revel obtained $350 million in exit financing — of which $250 million was used to pay existing debt and the remainder would be used to pay unsecured creditors and provide the casino with liquidity to fund any working capital and capital expenditure needs.
Former CEO, Kevin DeSanctis, has been replaced by new interim CEO, Jeffrey Hartmann, a former chief executive of Mohegan Sun Casino Resort in Connecticut. On the March 26, 2013, Mr. Hartman stated the plan was “[b]acked by overwhelming lender support” and that the financial restructuring will be complete before the summer season. He further stated that Revel “will emerge from this recapitalization positioned for long-term success, with the financial capacity to pursue our amenity enhancement opportunities, and ability to continue providing our guest with a signature Revel experience.”