Atlantic Club Casino Seeks Bankruptcy Protection
NEW JERSEY 101.5
The Atlantic Club Casino Hotel filed for Chapter 11 bankruptcy protection Thursday, the second Atlantic City casino to do so this year.
Half the city’s casinos have sought bankruptcy protection in the past six years.
The Atlantic Club, formerly known as the Atlantic City Hilton, says it will remain open as it seeks a buyer.
Michael Frawley, the casino’s chief operating officer, said its strategy of offering low-priced gambling, food and entertainment has been working, but not fast enough.
“We believe in our property’s positioning and the value-centric niche we committed to nearly 18 months ago,” he said. “Our creative branding campaign and the tremendous efforts of our employees have resulted in property growth within a continually challenged market. Unfortunately, the market has taken longer to rebound than we had hoped.”
Frawley said the bankruptcy process will be open-ended and said there is no time limit on finding a buyer in bankruptcy court. He said the casino, hotel and restaurants will remain open and operate on normal schedules.
“We have ample funding to carry us through this process, and anticipate a seamless transition for our employees and guests. It will be business as usual at The Atlantic Club.”
In its bankruptcy filing, the casino did not list its assets and liabilities. It is asking the court to allow it until Dec. 20 to list them.
The casino is owned by the Los Angeles hedge fund Colony Capital.
The city’s southernmost casino has struggled in Atlantic City’s cutthroat gambling market. A deal to sell it to the world’s largest poker website, PokerStars, fell through this year, and PokerStars allied itself with Resorts Casino Hotel to offer Internet gambling.
The Atlantic Club joins Revel Casino Hotel as casinos who sought Chapter 11 protection this year. Revel emerged from bankruptcy court in May.
Since 2007, when the Tropicana Casino and Hotel was stripped of its casino license and filed for bankruptcy, six of Atlantic City’s 12 casinos have done so. The three casinos that at the time were owned by Trump Entertainment Resorts went through bankruptcy court — for the third time — in 2009.
Each of those casinos has emerged from bankruptcy court and continues to operate.
The rapid expansion of casino gambling in the eastern United States has put tremendous pressure on a resort that for decades was the only place outside Nevada that offered legal casino gambling. The development of casinos in neighboring Pennsylvania, New York, Delaware, Maryland and Connecticut has cut deeply into Atlantic City’s market.
In 2006, when the first Pennsylvania casino opened, Atlantic City’s gambling revenue was $5.2 billion. It fell to just over $3 billion last year and could fall below that figure this year.
(Copyright 2013 by The Associated Press. All Rights Reserved.)