The Latest: Atlantic City OKs state loan to avoid default

AP News
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Posted: Jul 28, 2016 5:47 PM

ATLANTIC CITY, N.J. (AP) — The Latest on Atlantic City, New Jersey, getting a loan to help it though the end of the year and avoid default and possible bankruptcy (all times local):

5:30 p.m.

The City Council in Atlantic City, New Jersey, has approved a long-awaited state loan to help it stave off default and possible bankruptcy.

But if it can't repay the loan, the state can begin seizing city assets, including a coveted utility plant and land.

The $74 million loan was part of a larger financial aid package agreed to this year by the city and the state.

Moody's Investors Service warned Wednesday the city likely would default on a $3.4 million debt service payment on Monday if the loan didn't go through before then.

Democratic Council President Marty Small says the funds will relieve the short-term pressure on the city as it tries to come up with a fiscal reorganization that would prevent the state from taking over its finances and major decision-making power in November.

Atlantic City's tax base has contracted since four of its 12 casinos closed.

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4 p.m.

Atlantic City is about to get a long-awaited state loan to help it stave off default and possibly bankruptcy.

The City Council has called an emergency 4 p.m. meeting Thursday to vote to accept the $74 million loan to help the nearly broke city get through the rest of the year.

Moody's Investors Service warned on Wednesday that the city would likely default on a $3.4 million debt service payment on Monday if the loan did not go through before then.

Council President Marty Small says the funds will relieve the short-term pressure on the city as it tries to come up with a fiscal reorganization that would prevent the state from taking over its finances and major decision-making power in November.