ATLANTIC CITY, N.J. (AP) — Atlantic City's Revel Casino Hotel warned its staff Thursday that it will shut down this summer if a buyer can't be found in bankruptcy court.
In warning letters given to employees and obtained by The Associated Press, Revel said it is seeking a buyer for the struggling $2.4 billion casino, but can't guarantee one will be found. If not, employees could be terminated as soon as Aug. 18, Revel said in the letter.
"If Revel is unable to complete such a sale promptly, Revel expects to close its entire facility," the letters read. The company also said it plans to stay open while it searches for a buyer.
Shortly after distributing the letters, Revel filed a Chapter 11 petition in federal bankruptcy court, its second in as many years. Revel said it hopes to find a buyer quickly.
"We will work to reach an agreement with a new owner who will help ensure Revel's long-term financial stability and who shares our commitment to providing Revel's guests and players an exceptional experience," said Scott Kreeger, Revel's president and chief operating officer.
He said the casino has obtained a $125 million loan from one of its existing financiers so it can operate during its stay in bankruptcy court.
A judge in Camden will hear Revel's so-called first-day motions Friday, including requests to continue normal operations, pay employees and bills while under Chapter 11 protection.
Revel said the Aug. 18 date mentioned in the letter is not a deadline for a potential closure; rather it fulfills a legal requirement to give workers at least 60 days' notice of a potential layoff.
It could not be determined how much Revel might sell for in a bankruptcy auction, but it is sure to be a steep discount. Wall Street analysts and some casino executives said last month that $300 million was too high a price. A union that has been at odds with Revel since before it opened pegged its value in April at $25 million to $73 million, based on public filings.
Bob McDevitt, president of Local 54 of the Unite-HERE union, which won a representation election at Revel two weeks ago, pledged cooperation in the fight to save its workers' jobs.
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