Revel Atlantic City
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Barak Tulin
Partner, Partners
Barak Tulin is a creative, analytical, and effective executive with over 20 years of experience in performance improvement, restructuring and turnaround, financial planning and analysis, transaction services and general management.
- Winning bidder backed out, sold to backup
- Provided the highest and best recovery for the stakeholders
- Buyer ultimately sold the assets
An Atlantic City hotel and casino went through a prepackaged Chapter 11 bankruptcy one year after opening. Although the bankruptcy reorganized its capital structure, it did not cure the property’s underlying operational deficiencies and the company continued to perform poorly. After investment bankers and struggled to find qualified buyers, a CR3 professional guided the company through its second Chapter 11 bankruptcy with no stalking-horse bidder and assisted in planning and budgeting a shutdown of the facility to reduce cash burn before the sale. After multiple hearings and appeals, the sale to the backup bidder was approved, the bidder ultimately sold the property and the hotel and casino reopened in time for the Fourth of July holiday.
The Situation
- 1,399-room hotel and casino in Atlantic City that opened in 2012 at construction cost of $2.4B
- In 2013, company went through prepackaged Chapter 11 bankruptcy that reorganized the capital structure but did not cure underlying operational deficiencies including suboptimal location, inhospitable gaming environment, inconsistent operations across property, and below-average ADR
- With negative EBITDA since opening, the company continued to generate operating losses, liquidity declined, and investment bankers struggled to find qualified buyers
The Work
- CR3 professional was engaged to control cash, manage negotiations with lenders and equity, project cash flow with and without a bankruptcy, prepare for a potential second Chapter 11 bankruptcy, and support investment bankers during the sale process
- As liquidity approached zero and no interested buyers materialized, the engagement team guided the company through its second Chapter 11 bankruptcy with no stalking-horse bidder and uncertainty as to whether company would continue as a going concern or be liquidated
- Prepared weekly cash-flow budgets, operational analyses, Statements and Schedules, Monthly Operating Reports and other bankruptcy-related work product
- Assisted in the search for qualified buyers
- As losses mounted during the summer high season and the sale auction was not yet scheduled, the team assisted in planning and budgeting shutdown of the facility after Labor Day weekend to reduce cash burn before sale
The Results
- Contested bidding process led to a sale auction in which the winning bidder ultimately backed out 45 days later and relinquished its $11MM deposit
- After multiple hearings and appeals, the sale to backup bidder was approved by the bankruptcy court in the amount of $82MM, an offer which represented only a small proportion of the original construction cost but was the only viable bid for the property and provided the highest and best recovery for the stakeholders
- Buyer ultimately sold the assets for $200MM to another party, who reopened the property in time for the Fourth of July holiday
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