A famous New Jersey casino has been affected by Chapter 11 bankruptcy for a second time. The troubled Revel Casino is up for sale after the parent company has been forced to file for Chapter 11 bankruptcy. The bankruptcy petition was filed with the plan, citing the intent to sell most of the assets owned by the parent company, Revel AC Inc.
As the bankruptcy process proceeds, the casino will remain in operation. This is possible through a certain part of the bankruptcy agreement, which is known as a debtor-in-possession loan. Several years ago, the financial giant Morgan Stanley bought the New Jersey casino with the intention of improvement and expansion. However, just four years later, the investor sold its share of the casino and claimed that it took a loss amounting to over one billion dollars.
Revel Entertainment is the parent company in charge of running the hotel and casino. However, financial troubles forced the entertainment company to file for bankruptcy in 2013. A new marketing campaign was apparently unsuccessful in drawing in a new clientage or improving the profit margin, thus necessitating a second bankruptcy filing.
Bankruptcy sometimes has a negative connotation, and it may seem like it can be the death toll for a company or business. However, Chapter 11 bankruptcy can allow a business to financially regroup, pay off debts and formulate a plan to exit bankruptcy protection. When a business is faced with dire financial straits, it is vital to explore the possibility of bankruptcy as a means to find relief from creditors and other issues. Once out of bankruptcy, a company can use its "fresh financial start" to move toward a profitable business once again.
Source: Commercial Property Executive, "NJ's Revel Casino Files for Second Bankruptcy", Scott Baltic, June 24, 2014