CAMDEN, N.J. (AP) — Atlantic City's Revel Casino Hotel is "a melting ice cube" that needs immediate help to stay open until a buyer can be found, its lawyer told a bankruptcy court judge Friday.
The $2.4 billion casino is back in bankruptcy court for the second time in little over a year. It says it will shut down and fire its 3,170 employees if a buyer can't be found.
Revel lawyer John Cunningham told Judge Gloria Burns on Friday that Revel is losing $2 million a week, and has already lost $75 million this year.
"Simply put, Revel is not profitable," he said. "It has over $400 million of first-and-second-lien debt. It has steep operating costs, including $3 million a month under a burdensome contract with the energy company that runs its power plant.
"This is a melting ice cube," Cunningham said.
That energy company, ACR Energy Partners, is the largest creditor listed in the casino's bankruptcy filing, with a claim of nearly $10 million.
The casino wants a sale as quickly as possible. In a proposed funding plan that Judge Gloria Burns gave temporary approval to, Revel anticipates having bids submitted by Aug. 3 and a sale hearing conducted on or about Aug. 25, though those dates could change.
"Quite frankly, your honor: It's time," Cunningham said. "It's time for bidders to put their money where their mouth is and participate in this process. Revel is for sale for the highest and best price."
He said there had been "substantial buyer interest" before Thursday's bankruptcy filing, but none that ended in a commitment to buy the casino.
The judge granted temporary permission Friday for the casino to pay employees and vendors, pay taxes and insurance costs and some utility bills, subject to further review by the U.S. Bankruptcy Trustee's office. She also gave interim approval Friday afternoon on the heart of the plan: a $125 million loan Revel received from one of its lenders to keep operating during bankruptcy court protection.
She said she is sensitive to the casino's plight.
"It's a pretty dire situation," she said.
Cunningham urged the judge to approve the financing.
"Everybody is watching what is happening here today, and we want to send the message that Revel is open for business."
It could not be determined how much Revel might sell for in a bankruptcy auction, but it is sure to be a steep discount. Wall Street analysts and some casino executives said last month that $300 million was too high a price. A union that has been at odds with Revel since before it opened pegged its value in April at $25 million to $73 million, based on public filings.
Wayne Parry can be reached at http://twitter.com/WayneParryAC