Revel AC creditor committee seeks denial of $125 million DIP facility

By Kali Hays

New York, Nov. 14 – Revel AC, Inc.’s official committee of unsecured creditors objected to final approval of the company’s proposed $125 million debtor-in-possession facility, according to a Friday filing with the U.S. Bankruptcy Court for the District of New Jersey.

As previously reported, Revel received access to $28.73 million of the facility through Nov. 30 under a fifth amendment to an interim DIP order.

Based on an “egregious ‘cashless roll-up’ feature, liens on the proceeds of avoidance actions and other extraordinary provisions,” the objection claims that if the DIP loan is approved on a final basis it “will eliminate the only sources of recovery for unsecured creditors.”

The committee also claimed that Revel’s administrative and collateral agent, Wells Fargo NA and lender Wells Fargo Principle Lending LLC have “refused to engage in any negotiations with the committee, preferring instead to engage in brinkmanship and cause the parties and the court to expend substantial resources to prepare for a contested DIP hearing.”

“The DIP lender seeks unprecedented protections without allowing the unsecured creditors to maintain even the hope of any recovery. With Revel shuttered and the employees sent home, coupled with the DIP lender advancing next to nothing net of the interest and fees, it is now without question that these cases are being run solely for the DIP lender’s benefit,” the objection stated.

Unless modified consistent with its objection, the committee asked that the court deny approval of the “repugnant” DIP agreement, which it claimed is “not even finalized as of the day of these filings.”

A hearing on the financing is scheduled for Nov. 21.

Revel, an Atlantic City, N.J.-based gaming and entertainment company, filed for bankruptcy on June 19. The Chapter 11 case number is 14-22654.

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