Revel bankruptcy
Quote: WALL STREET JOURNALRevel, the struggling Atlantic City casino, has hired restructuring lawyers and bankers to mull options for reworking a heavy debt load, said people familiar with the matter.
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Moderator's Note: The entire article was posted here, in violation of the WoV copyright policy.
The article can be read here:
http://online.wsj.com/article/SB10001424127887324196204578300423401035896.html
FOX BUSINESS ARTICLE ON REVEL
Looking forward to lots of changes for the property, except let's keep the nonsmoking policy, please.
Quote:hired Alvarez & Marsal, a turnaround firm that helps companies conserve cash and restructure operations.
Translation: Hello pink slips, bye bye employees.
The non- smoking policy is brilliant! Revel should look into banning alcohol use on the premises as well. No porno in the rooms and casino closed on Sundays for church services.Quote: sodawaterWas only a matter of time.
Looking forward to lots of changes for the property, except let's keep the nonsmoking policy, please.
But on brighter note, changing the name wouldn't be hard since the never put it on the building.
What can they offer?
I think loosening the slots, and proving they are looser would be a great advertising point.
The abolition of unfavorable BJ rules wouldn't hurt.
Loosen comps.
The word will get out.
Quote: MrVAC and its casinos need to market themselves as an alternative to the rest.
What can they offer?
Sports and online poker are the only hope.
Casinos in PA and NY are double daggers in the heart of AC. Maryland is also a flesh wound.
We need a miracle.
The systems players and the dice controllers are proving to be too much for the ill fated casino.....maybe they could try a smoking only casino. Just throwing out ideas.Quote: MrVAC and its casinos need to market themselves as an alternative to the rest.
What can they offer?
I think loosening the slots, and proving they are looser would be a great advertising point.
The abolition of unfavorable BJ rules wouldn't hurt.
Loosen comps.
The word will get out.
Quote: BozThe bigger story is who gets this place and can it be saved?
As Gibbs says on "NCIS," there are no coincidences (or at least not so many):
"Las Vegas gambling giant MGM Resorts International will get a second chance to keep its ownership in Borgata Hotel Casino & Spa and seek a New Jersey casino license — three years after it left Atlantic City in a highly publicized dispute. In a preliminary move, the New Jersey Casino Control Commission agreed Wednesday to restart the licensing process and consider MGM’s request to retain its 50 percent stake in Borgata. MGM will now file an application to qualify for a license.
Regulators emphasized that MGM must go through an exhaustive background investigation before any final decisions are made about its license. They could not say how long it will take to complete the investigation. “Let me stress, we are not here today to determine whether MGM is suitable to hold a license. That’s an issue for another day,” said Matthew Levinson, the Casino Control Commission’s chairman.
MGM is asking for permission to keep its ownership in Borgata as a March 24 deadline approaches for the casino’s sale. However, the sale deadline will be stayed while MGM pursues a license. In the meantime, MGM’s interest in Borgata will be held in a trust pending completion of the licensing process. acpress
It looks like they might not make that 5 year anniversary.
Quote: Moderator, in first post of this threadModerator's Note: The entire article was posted here, in violation of the WoV copyright policy.
The article can be read here:
http://online.wsj.com/article/SB10001424127887324196204578300423401035896.html
Apparently not, unless you have a subscription to that site. Do you have a link to a free site that at least summarizes the story that you deleted?
Quote: DocDo you have a link to a free site that at least summarizes the story that you deleted?
It's not The Journal, but The Press ain't exactly chopped liver:
"Senate President Stephen Sweeney is warning that the $2.4 billion Revel megaresort appears “on the verge of bankruptcy and collapse” and is demanding a briefing on its financial plight from New Jersey’s top casino regulator.
Sweeney outlined his concerns about Revel in a three-page letter sent Thursday to David Rebuck, director of the Division of Gaming Enforcement, the state agency that oversees Atlantic City’s casino industry. In it, Sweeney criticizes Rebuck and the division for not keeping a close enough watch on Revel’s deteriorating finances. Sweeney’s letter follows Rebuck’s disclosure on Wednesday that Revel has hired a team of outside legal and financial advisers to help it restructure its $1.3 billion debt. “Your oversight of Revel to date has neither impressed me nor many of my colleagues,” Sweeney told Rebuck in the letter. acpress
Quote: aceofspades
"By comparison, the Borgata Hotel Casino & Spa, A.C.'s other luxury casino, logged a 9% drop in gaming revenue but still raked in a city-leading $47.1 million in January."
I wonder how Harrah's and Caesars are taking the news that they're not luxury casinos;-)
Quote: BhappyNot a big deal. If Kevin gets to keep his job, he is a winner. The only losers are the people who invested. Majority of them were large hedge funds. Hedge funds do not pick winners all the time. If their overall portfolio shows positive return they are happy. Perhaps this was Kevin's plan all along. He has figured out how to play on Wall Street's greed.
If Kevin gets to keep his job, he's got dirty pictures of someone. By far the most likely outcome is bankruptcy and a sale. The new owners would be complete idiots to retain the incompetent management team that created the failure in the first place.
If a new noodle bar won't attract gamblers, what will ?
A Noodle Bar! Finally a reason to go to Revel. Can you smoke in the Noodle Bar or on the Noodle Bar?Quote: Buzzard"We continue to improve our overall amenities, including a new noodle bar, slot players' lounge, new restaurants and day club."
If a new noodle bar won't attract gamblers, what will ?
Quote: BuzzardDamn, now I have to cancel my vacation plans until May.
That might be when my next trip to AC will be
Quote: BuzzardGee, how it is business concerns that are causing the delay. And not the recent ass-kicking you took.
A big payment expected from a client whose case is over was supposed to come in yesterday - instead, I received notice that the former client filed for bankruptcy - and guess where I fall on the list of importance when it comes to getting paid...
Quote: rdw4potusIf Kevin gets to keep his job, he's got dirty pictures of someone. By far the most likely outcome is bankruptcy and a sale. The new owners would be complete idiots to retain the incompetent management team that created the failure in the first place.
Why are you so worked up against Kevin? Did he abuse you or your family members? are you one those idiots who invested money in his property? are you upset because he had a gall to build an upscale place, and kept filthy, smoking, cheapskate gamblers out of his property? do you miss all you can eat MickyD buffetts, and bed bug infested rooms?
Be Happy. Only employees, and investors should be concerned if Revel makes any money or not. You don't go there or don't have any intention of going there. So what difference does it make to you if the place stays open or shuts down?
Quote: BhappyWhy are you so worked up against Kevin? Did he abuse you or your family members? are you one those idiots who invested money in his property? are you upset because he had a gall to build an upscale place, and kept filthy, smoking, cheapskate gamblers out of his property? do you miss all you can eat MickyD buffetts, and bed bug infested rooms?
Be Happy. Only employees, and investors should be concerned if Revel makes any money or not. You don't go there or don't have any intention of going there. So what difference does it make to you if the place stays open or shuts down?
Uk, you really need to calm down, Kevin is the face of the property that treated so many of us poorly. He is the one that told us Gamblers were not important. He is the one who told us HE knew best, not us. So allow us to kick him while he is down.
While you continue to think that gamblers who are not happy with the place are "filthy, smoking, cheapskate gamblers".
Perhaps you are the one who needs to figure out why you get so "worked up" when good potential players on all forums state they will never play at Revel again while Kevin is still there. Or are we all Smokers and Union Workers? You know, the groups you have stated have been out to get Revel from day one and that is the reason they are failing.
Quote: aceofspadesI don't think the noodle bar opens until May - it is going to occupy the small takeout window area that Amada nows uses
And that I have never seen open, or at least with any customers.
Quote: BozSo allow us to kick him while he is down.
Hey evry one has quirky way to get entertainment. Most noise comes from nickle&dime gamblers. Ace gets all the attention he needs. He is taken care quite well. Free shows, free food, free room, peronalized apology from Kevin.....
Quote: vendman1There was another thread about the woeful financial condition of the Revel a while back and another member suggested that Bankruptcy was the plan all along.
Actually, that doesn't sound that ridiculous. Going in they must realize that there is no way to turn a profit with that debt load.
The way it looks to me is that if you go into it with the idea that you will work toward bankruptcy to get rid of construction debt, then the equity investors lose completely, the debt investors lose (perhaps substantially), and the management team probably loses everything, too. It's just a case of wealth destruction through inefficient & ineffective operation, with the debt investors being the ones that keep whatever is recoverable.
What am I missing here?
Quote: Doc
What am I missing here?
Clearly you have not seen "The Producers."
Quote: DocI haven't thought it all the way through, but I must not understand something basic about a bankruptcy planned from the beginning. Generally, company management is selected by equity investors, the stockholders. In a bankruptcy, the equity investors lose, possibly everything, and the debt investors typically wind up as the new owners, even if they get something that is worth less than what they loaned. So why would equity investors allow management to stay in place and work toward bankruptcy? After the bankruptcy, why would the new owners want to have the old management team still involved; after all, they screwed the previous owners and might do something similar again.
The way it looks to me is that if you go into it with the idea that you will work toward bankruptcy to get rid of construction debt, then the equity investors lose completely, the debt investors lose (perhaps substantially), and the management team probably loses everything, too. It's just a case of wealth destruction through inefficient & ineffective operation, with the debt investors being the ones that keep whatever is recoverable.
What am I missing here?
The investors own the asset and the debt essentially and keep the 260 million dollar 20 year tax break. Perhaps the debt is inflated and they buy it at a discount. There are so many ways it can be done with shell corporations. It is a possibility is all I am saying.
Quote: DocI haven't thought it all the way through, but I must not understand something basic about a bankruptcy planned from the beginning. Generally, company management is selected by equity investors, the stockholders. In a bankruptcy, the equity investors lose, possibly everything, and the debt investors typically wind up as the new owners, even if they get something that is worth less than what they loaned. So why would equity investors allow management to stay in place and work toward bankruptcy? After the bankruptcy, why would the new owners want to have the old management team still involved; after all, they screwed the previous owners and might do something similar again.
The way it looks to me is that if you go into it with the idea that you will work toward bankruptcy to get rid of construction debt, then the equity investors lose completely, the debt investors lose (perhaps substantially), and the management team probably loses everything, too. It's just a case of wealth destruction through inefficient & ineffective operation, with the debt investors being the ones that keep whatever is recoverable.
What am I missing here?
The investors own the asset and the debt essentially and keep the 260 million dollar 20 year tax break. Perhaps the debt is inflated and they buy it at a discount. There are so many ways it can be done with shell corporations. It is a possibility is all I am saying.
Quote: onenickelmiracleThe real estate is the biggest problem it has though. Sitting at the end of the boardwalk, nobody passes it going anywhere else.
I disagree because Borgata isnt exactly in prime area. Revels problem gaining gambling share has been simple from Day 1, Kevin DeSanctis and his public comments about gamblers. He did not offer them a reason to make Revel their home casino. Those that did try it found comps to be less than other AC casinos, they found no food options, no comped rooms, no players club levels at the start or any of the other things casinos across the country have used to build customer bases of all sizes. And all through it Kevin fiddled while Rome never had a chance to be built, instead telling people Revel was different and he knew what the future was, he was a "resort" and gambling was only a part of what he was doing. He felt people soon would be coming to Revel instead of Miami. That alone should make anyone question why he has a job.
Many defenders blame Unions, Smoking Lobbys and "Nickle & Dime" players for being out to get Revel from the start. Yet a closer look at the numbers shows many gave Revel a chance last summer as gambling reveue approached $20M in July, yet has now dropped 63% from it's high. Borgata is down less than 23% from its summer peak.
They failed to give players a reason to come back. And that is their fault, either they determined most AC players are not worth having as customers and dont play enough, or players determined Revel doesnt offer them enough to come back. Either way, a close look around the web and you can see a negative buzz from gamblers about Revel and Kevin personally that will never be able to be overcome with Kevin in charge.
Think about it, name one other person in charge of a casino that is disliked as much as this guy.
Quote: BozThink about it, name one other person in charge of a casino that is disliked as much as this guy.
Donald Trump. He screwed up three places with a combination of ignorance and arrogance.
Quote: pacomartinActually, that doesn't sound that ridiculous. Going in they must realize that there is no way to turn a profit with that debt load.
You and I might have realized that, but SOMEONE loaned them over a billion dollars. I can assure you that that SOMEONE expected to be repaid with the expected profits. And just saying 'a hedge fund gave them the money' makes no sense.... I know a hedge fund manager, and he absolutely does due diligence and expects his loans to be profitable. Of course by definition he is wrong sometimes, but will not just say 'oh well'....
In summary.... SOMEONE thought they could turn a profit with that debt load....
Quote: BhappyIf Nickle & Dime players were Revel's salvation, then I have a bridge to sell. 3 (and possibly 4th) casinos frequented by the same Nickle&Dime players sold between $20-$35 million each. Eventhough, they were giving out freebies as generously as they can. There is no blood left in the Nick&Dime gamblers who freqeunt AC casinos.
There is no blood left in AC period. That was apparent before Revel was built. But for the sake of argument, let's say that Revel's "salvation" will come from other visitors. Who will they be? Not AC whales. Borgata's sales have hardly been affected at all by Revel's existence. So that's an epic failure. Maybe Revel will draw business from other areas. Well, Sands and Foxwoods are doing better than they did before Revel was built. So is Resorts World. Maybe Revel will be saved by visitors who don't want to gamble. AC gets lots of those, right? Maybe NYC kids will spend 3 hours travelling to AC to go clubbing! Yeah.......
Quote: SOOPOOYou and I might have realized that, but SOMEONE loaned them over a billion dollars. I can assure you that that SOMEONE expected to be repaid with the expected profits. And just saying 'a hedge fund gave them the money' makes no sense.... I know a hedge fund manager, and he absolutely does due diligence and expects his loans to be profitable. Of course by definition he is wrong sometimes, but will not just say 'oh well'....
In summary.... SOMEONE thought they could turn a profit with that debt load....
Exactly my point. It may seem obvious in hindsight that the Revel was doomed from the beginning. But nobody invested money hoping to go to bankruptcy. Which now seems inevitable.
Now with casinos in CT, NY state, NYC, Philly, and soon to be Maryland, it's now the closest option for almost no one except NJ residents.
I happen to hate the PA casinos, but if I lived in Philly, I really can't imagine going to AC that often. Location is king.
That's why sports betting is the only way the city can be saved. Because if you live in NYC or Philly and want to bet on sports legally, then location wouldn't matter.
