$100 million gap in Atlantic City’s budget because of the closure of 4 casinos last year.
Donald Steckroth, who served 14 years with the U.S. Bankruptcy Court in New Jersey as a judge has been appointed by the city to enter into negotiations with certain parties involved in its corporate restructuring. New Jersey, one of the few states where online sports betting is legal, is currently on the brink of bankruptcy. The same goes for Cole Schotz, a law firm that hired the former judge, in the framework of its corporate restructuring practice.
According to US gambling news, Steckroth will try to obtain a broker deal. The parties involved are the city’s team that was appointed to get Atlantic City out of its current financial mess, businesses and trade unions. Atlantic City is $100 million short of its projected revenue goals for 2015. This is largely due to the closing of four casinos last year.
Bankruptcy was not yet on the cards
Earlier this year, New Jersey Governor Chris Christie had gathered together an emergency management team for Atlantic City headed by Kevin Lavin. The team which included former Detroit emergency manager Kevyn Orr attempted to stop an impending financial disaster in Atlantic City. Last month, the team reported that the gambling hub, battling to maintain its privileged status under US gambling laws in Atlantic City, should cut costs, envisage layoffs and go for long terms bonds.
Even though it has been observed that Atlantic City is not quite yet bankrupt, every effort has been mobilized to prevent just that. With the appointment of the team, U.S. municipal bond investors and Wall Street credit rating agencies speculate that this action is a far cry from ‘the state’s historically strong support of its financially distressed cities’.