Atlantic Club casino, in bankruptcy, is seeking buyers
CAMDEN The Atlantic Club Casino Hotel plans to seek bids from potential buyers by Nov. 18 and be sold at a bankruptcy auction by mid-December.
The casino-hotel received approval Friday from a federal bankruptcy judge to continue operating normally under Chapter 11 protection.
In its bankruptcy filing late Wednesday, the casino said it does not have enough cash to continue to operate for a long time. In court Friday, its lawyer, Michael Sirota, said, "We do plan to move fairly quickly."
Judge Gloria Burns approved a schedule under which the court would entertain bids from prospective buyers Nov. 18, choose a buyer by mid-December, and close the sale by the middle of February.
Michael Frawley, the casino's chief operating officer, said he was pleased that the initial hearing went smoothly.
"It's the beginning of a necessary process," he said. "We're fairly confident it will move quickly."
The Atlantic Club is the second Atlantic City casino to file for Chapter 11 bankruptcy this year. Revel Casino Hotel emerged from bankruptcy in May.
Half the city's 12 casinos have filed for Chapter 11 protection over the last six years.
The judge on Friday allowed the casino to continue to pay employees and key vendors, as well as taxes and insurance, and maintain player loyalty programs while still in bankruptcy court.
The Atlantic Club was formerly the Atlantic City Hilton.
In an interview Thursday, Eric Matejevich, co-chief operating officer of the casino's parent company, said a number of potential buyers had expressed interest in purchasing the casino out of bankruptcy court.
The eventual price is likely to be less than the $15 million that the PokerStars website was prepared to pay for the casino before the deal fell through this year, and will in all likelihood mark the lowest price ever paid for an Atlantic City casino.
For the first nine months of this year, the Atlantic Club experienced a $7.3 million operating loss, according to bankruptcy court documents. It currently has 1,660 employees, and no layoffs are planned, Frawley said.
Matejevich said a company the casino hired to solicit potential buyers contacted 120 prospective purchasers from November 2011 through September 2012. Of those, 12 signed confidentiality agreements to explore the casino's finances, but none offered to buy it.
The Atlantic Club has struggled to keep pace with newer, larger casinos, both in Atlantic City and in nearby states, including Pennsylvania, New York, and Delaware.
Frawley said its strategy over the last year and a half of offering low-priced gambling, food, and entertainment has been working, but not fast enough. About 70 percent of the casino's floor consists of penny slot machines.