Casino in New Jersey Tries to Fight off Foreclosure
February 18th, 2009
Resorts Atlantic City did not deny that it has been defaulting in mortgage payments since last October. But the owner is trying to fight off foreclosure by arguing that the lenders do not have a license to run a casino and hence cannot independently operate the joint.
Resorts is planning to put aside funds ($15 million) as a reserve to guarantee money to winning gamblers, for payroll and for taxes. Meanwhile the two sides are battling to take over the first Casino of New Jersey.
On Wednesday 18th February the Casino Control Commission plans to mull over a request made by Column Financial. The property will either be foreclosed upon or the owners will surrender the title to it without enduring foreclosure.
Resorts International Hotel and its affiliates continue to argue that Column does not have the requisite license and therefore should not be allowed to take over the casino cum hotel. The owners of the casino said in a written complaint that was filed before the commission on 5th February, “In the interest of its efforts to maintain the current operations at Resorts, including the payment of taxes, winning wagers and compensation due employees and vendors, (Resorts) believed it would be prudent to stop paying monthly interest in connection with the loan.”
The foreclosure crisis has hurt not only the humble homeowner but also glitzy casinos right across Atlantic City. There is stiff competition from similar joints in Pennsylvania and New York. In May 1978 Resorts was the first casino to come up outside Las Vegas and is one of the struggling parlours here.
Usually a modest casino with senior clients tend to spend and lose less money. These resorts are lagging behind in competition with the newer more glamorous units like Borgata Hotel Casino & Spa as well as Harrah’s Resort Atlantic City.
In February Resorts won $466,000 from gamblers each day compared to $1.8 million noted in Brogata Resorts. The revenues fell by over 25% in February in comparison to the previous month and plummeted to 16% as against the twelve months of 2008.
In January Column Financial (mortgage subsidiary of Credit Suisse) served Resorts with a foreclosure notice on the casino alleging that payments have not been made since October for a loan of $360 million. The owner of the casino, Colony Capital deals in property and is also the owner of Atlantic City Hilton Casino and Resort – the latter not being affected by the foreclosure notice.
- Banks are Stoking the Flames of the Foreclosure Crisis
- Greenwich Town Is Reeling Under Foreclosures
- America is Desolated and Devastated by Foreclosures
- Bailout Money Has Not Benefited a Single Foreclosure Victim
- Foreclosures Are Centred in Four States
- Foreclosures Expected To Drop as Mortgage Rates Decrease
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