Liquidation of Revel Casino in Atlantic City, NJ

Revel Casino opened in 2012. It was open for little more than two years before it declared bankruptcy (Chapter 11) in September 2014. It was the tallest building in Atlantic City and included two nightclubs, 13 restaurants and several swimming pools. The massive facility cost $2.4 billion to construct.

The business never turned a profit, and after two years of significant losses, Revel declared bankruptcy. Due to the enormous debt it had accrued, as well as its failing business management and operations, Revel was unable to reach an agreement with a suitable buyer.

When a business of this magnitude opts for bankruptcy filing, there are massive amounts of technical and economic considerations, paperwork, legal fees, and de-construction. This behemoth and its bankruptcy is difficult to overlook, given its uncommon scale.

What can be seen, however, is a common aspect among many Chapter 11 cases, which is business liquidation. The liquidation plan for Revel Casino was long and complicated, due mostly to the fact that there were several difficult and complicated settlements with Revel’s creditors. Before liquidation plans can be approved – in this case, by a federal judge – it is often required for the business to make clear its plans to settle with those with whom it holds a debt.

From investors to operators to legal teams and beyond, everyone is looking to recoup what they have invested or are owed. Once an approved settlement(s) are in place, the liquidation of the business assets can take place. Often times, the creditors and investors are powerless against whatever the market value of the business is as it is liquidated.

In the case of Revel, the physical structure itself is of tremendous value. Its building is 47 stories tall, and it sits on 20 acres of premium oceanfront real estate. In addition to the 1399 furnished guest rooms, 130,000 square foot casino, and over 30,000 live trees and plants, there are 13 restaurants’ worth of furnishings and equipment, and 2500 slot machines and 120 game tables.

The liquidation of such a massive facility will involve a more involved process than that of a small business liquidation. Restaurant equipment, furniture, bedding, and casino/gaming equipment will all be divided and either sold in lots or auctioned off. The final outcome will most likely result in partial debts covered, but more than a few unhappy creditors.