The hotel/casino features 800 rooms and a 75,374-square-foot main casino floor. It is owned by RIH Acquisitions NJ LLC, a subsidiary of Resort International Holdings LLC, which itself is an affiliate of Colony Capital LLC. In the filing, RIH stated that on July 9, due to "the severe impact of the current economic conditions," it failed to make its monthly interest payment and monthly funding requirements under its loan agreement, thereby triggering a default.
As of June 30, the outstanding debt balance amounted to $348.2 million, plus related accrued interest of $868,000. The company further stated it was in negotiations to modify the terms of the loan agreement. According to the filing, RIH refinanced its outstanding debt in 2006 by entering in a commercial mortgage-backed security with JP Morgan Chase.
Nicholas L. Ribis, CEO of the AC Hilton, was quoted in a report in the Atlantic City Press that it would be "business as usual" for the casino. "Our day-to-day operations will continue without interruption and seamlessly," he said. "For our employees and customers, there is no change."
For the first half of the year, the AC Hilton racked up net revenues of $83.7 million, down from $119.9 million during the same period in 2008. It posted a gross operating loss of $9 million in the first half of the year, compared to a profit of $8.4 million in the first six months of 2008.
Yet the AC Hilton was far from the only casino in the city encountering tough times. According to the casino control commission, the 11 casinos in the city reported gross operating profits of $198.4 million in the second quarter, a 19.8% drop from the same period of 2008 when the tally reached $247.3 million. Net revenues fell by 15.2% in the quarter to $975.7 million.
Daniel Henegham, a spokesperson for the casino commission, tells GlobeSt.com that the agency has been closely monitoring the Hilton situation for some time, and "will continue to do so to ensure all regulations are met."
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