The Revel casino hotel in Atlantic City has set Aug. 6 as a tentative auction date for the property and is now waiting for bankruptcy court approval.
Officials for Revel AC Inc. say the casino needs to go to auction soon as the company does not have the money to keep the property running for much longer. The company’s lawyers have also asked for a July 11 hearing before the court to set bid procedures.
Revel lawyer John Cunningham told Judge Gloria Burns earlier this month 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.”
The energy company, ACR Energy Partners, is the casino’s largest creditor with a claim of nearly $10 million, according to the Associated Press.
Meanwhile, Revel has received court approval to borrow $23.9 million that it said would keep the 1,400-room resort operating for the coming month.
Revel officials have said that if a buyer isn’t found the casino may be forced to shut down before the end of summer and layoff its more than 3,000 employees.
“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.”
Bidders would have to submit qualified bids by Aug. 1, according to the company’s motion.
Revel filed for its second bankruptcy earlier this month just 13 months after emerging from the first reorganization in May 2013.
The initial bankruptcy filing removed $1.23 billion in debt from the property and reduced the casino’s annual interest expense to $30 million from $100 million. Revel was then taken over by Hedge funds controlling $923 of that debt.
According to court documents, Revel still has $447 million in secured debt and just $9 million in cash.
