Atlantic City's Revel Casino Hotel is still seeking bidders in bankruptcy court, but its ability to find a buyer will improve once it closes and stops "bleeding money,'' its attorney said at a hearing on Monday.
Revel, the beachfront, Las-Vegas-style casino that state officials thought would help rejuvenate the city's economy, initially had hoped to stay open and find potential bidders as it filed its second bankruptcy last month since opening in 2012.
But last week it said it would shut down, and it indefinitely postponed a planned auction after failing to find qualified bidders. The hotel is scheduled to close after guests leave on Sept. 1, with gambling operations to cease at 5 p.m. the next day.
"We are bleeding money every week,'' John Cunningham, an attorney for Revel, told U.S. Bankruptcy Judge Gloria Burns in New Jersey on Monday. Even now, during peak season, Revel is losing about $2 million every week.
"That burn rate and those losses are actually a detriment'' to the sale process, because a buyer would have to spend money to continue to run Revel at a loss, Cunningham said. But a buyer could seek to reopen the resort in the future.
To begin an auction, Revel would have to find a suitable opening bid. All those received so far valued the resort at lower levels that were more in line with a shuttered facility, rather than as an ongoing business, Cunningham said.
The closure will cost at least 3,100 jobs in a city already hit by three other casino closures announced in the last year. Atlantic City is facing steep competition from increased gambling in neighboring states.
"It's a very sad day for Atlantic City and for this court,'' Burns said, adding that she hoped a sale could get a potential buyer interested in reopening Revel.
— By Reuters