New Jersey residents who are employed by the casino formerly known as the Atlantic City Hilton can feel a little relief with the news that it will remain open. The parent company was able to reorganize debts and stop foreclosure on the casino now known as ACH. But it means two Mississippi casinos owned by the parent company will be foreclosed on in the process.
The parent company of the casino in question will have mortgage debt wiped out with the foreclosure of the two Mississippi casinos in an effort to save the ACH. In addition, the deal will ensure that a cash infusion from a 2009 flood insurance claim will be put back into the casino as well. This deal will release at least $24.3 million in new funds for the casino.
The casino stopped paying its creditors in 2009 and has been in danger of closing ever since, which could have led to 1,925 jobs being lost. The casino lost almost $11 million in the first six months of this year alone. It’s important to remember that ACH is not the only casino in the area experiencing heavy losses in this tough economy.
Financial documents filed in the proceedings suggest ACH owed as much as $414.6 million to its lenders as of June 2011. In 2006, the ACH parent company borrowed money for the two Mississippi casinos using the ACH as security. As such, the two Mississippi casinos will be foreclosed on in order to stop foreclosure of ACH, and ACH lenders will be the new owners of the Mississippi casinos.
Although New Jersey residents may have a tough time relating to financial problems of this size, this case serves as a good example that anyone can fall behind in this economy. Many programs and options are available to stop foreclosure, and this often involves a simple reorganization of debt. The sooner a bankruptcy attorney can be retained to assist in debt reorganization, the sooner and easier it is to stop foreclosure.
Source: Associated Press, “Owners of ACH drop sale bid-casino will stay open,” Wayne Parry, Nov. 7, 2011
