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Power plant that powers casino now facing bankruptcy after casino’s closure

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get credit after filing personal bankruptcy?”

 

By now, nearly every set of eyes in the civilized world has seen video surveillance footage of former Baltimore Ravens running back Ray Rice striking his then-fiancé on an Atlantic City, New Jersey casino elevator. That casino—the Revel Casino Hotel—has since closed down. The Revel is just the latest in a string of Atlantic City casino closings.

Atlantic City Charlotte Bankruptcy Attorney Chapter 11 LawyerNow ACR Energy Partners L.L.C.—the group that owns the $129 million utility plant that heated and cooled the Revel—has warned that its Atlantic City-area power plant may be facing bankruptcy. The amount the Revel owes to ACR since its June bankruptcy filing totals some $11.85 million. ACR has been paid just $2.35 million of that amount. Revel was already $11 million behind on payments to ACR when it filed for bankruptcy.

In addition to bills for utility service, the Revel owes ACR $1.7 million per month in debt repayments. ACR described the Revel’s most recent nine-month payment history as “drip-feed” and said the casino closing left it “with an escalating liquidity crisis and limited ability to meet its own obligations.” Revel is ACR’s only power-plant customer.

Despite its closure, the Revel is still being powered and its air is still being conditioned. Otherwise the interior of the building risks a nearly “instant build-up of heat and humidity… both of which are terrible for finishes, equipment and everything else inside the building,” said Greg Lucado, who directs a construction management program at nearby Philadelphia University.

The Revel is courting buyers, with an eye towards reopening. The casino is saddled with $447 million in secured debt. The partner entities that comprise ACR spent $42 million on the power plant’s construction. At the time construction began in 2008, ACR considered the Revel deal to be risky, so it bargained for a 20-year contract with the casino during which it would receive a fixed $20.1 million annually plus an additional $4 million annually for operations and maintenance. Costs associated with operating the casino range up to $500,000 per month.

ACR borrowed $118.6 million in the tax-exempt municipal bond market to finance construction of the power plant. Now it is fighting for a place at the table with other creditors, but it has told investors that “[t]here is absolutely no assurance” that its contract with the Revel will be honored by a new buyer, if one emerges.

That could lead to the collapse of ACR and the closure of the power plant. If that happens, the consequences could be disastrous, with the casino structure left to fall into disrepair, which would make the prospect of a buyer reopening the casino or converting it to another use any time soon unlikely.

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.

 

 

About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.

 

 

Sources:

http://articles.philly.com/2014-09-21/business/54139055_1_revel-casino-hotel-court-filing-debtors

http://www.city-data.com/city/Mays-Landing-New-Jersey.html

http://articles.philly.com/2014-08-29/business/53329577_1_revel-utility-plant-power-plant

 

 

Image Credit:

http://commons.wikimedia.org/wiki/File:AtlanticCity_RevelCasino.jpg

“Revel Casino under construction in Atlantic City, NJ.” March 6, 2010 by “Tallguy0187”

 

 

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