Thursday November 7,2013 : ATLANTIC CLUB TO FILE FOR BANKRUPTCY
What goes around, comes around.
Less than a year after backing out of its deal with Pokerstars parent Rational Group, and making off with around $15 million of Rational's money, the Atlantic Club casino in Atlantic City is about to file for bankruptcy, according to a report in the Wall Street Journal.
InfoPowa readers will recall that Rational Group, motivated by a desire to be in a position to launch online gambling in New Jersey through ownership of a licensed land casino, pumped money and an acquisition deposit into the small, failing land casino owned by the Colony Capital Group whilst a licensing application was considered by the state regulator.
When the window allowed for Rational to obtain a license in terms of the acquisition contract expired, Atlantic Club refused to extend and walked away with Rational's cash, triggering an acrimonious law suit which Rational lost.
This week a reliable source informed the WSJ the casino is preparing to file in U.S. Bankruptcy Court in Camden, N.J for Chapter 11 bankruptcy protection and will put the business up for auction.
The law firm of Cole Schotz is handling the casino's Chapter 11 case, sources said. The company has lined up about $15 million in bankruptcy financing from a hedge fund, according to sources. Under bankruptcy law, that loan could serve as a floor price for the auction.
Atlantic Club, Colony Capital and Cole Schotz didn't return Journal calls seeking comment.