Last week, I got an email from Rob Tornoe, a political cartoonist who has a regular spot on this site.
“I just received a Revel bankruptcy claim in the mail. Is this something going out to everyone in New Jersey?”
My ears – or eyes – perked up. Tornoe had gotten notice that he was a creditor in the Revel bankruptcy.
I’ve been asked often what would happen to N.J.’s investment in Revel. “Investment” is not quite the right word, though. What the state of N.J. did was offer Revel tax rebates in order to help them open. N.J. didn’t give them any money, so I didn’t understand why N.J. tax payers would be getting letters as creditors.
I rushed to my mailbox to see if I got a notice too, but nothing. To complicate matters, Tornoe is not a resident of the state of N.J. and hasn’t had to pay N.J. taxes in years.
So I called a bankruptcy attorney. “Any creditor and essentially anybody who’s owed money and who is listed on the debtor’s books and records as being owed money is going to be considered a creditor in this case,” said Steven Smith, a partner in the restructuring and insolvency department at Edwards Wildman Palmer, and who has been following the Revel bankruptcy very closely.
Did Revel owe Tornoe any money? Nope, he said.
But Tornoe did realize that back in 2011, Revel bought a comic of his that had originally appeared in the Press of Atlantic City, for which they had paid him in full.
Turns out, there’s another group who will get these kinds of notices: “parties who have contracts with the company,” said Smith. “Maybe thse contracts are still alive and well even though the non-debtor’s contract is paid in full and current.”
This made more sense. Perhaps Revel thought that they’d one day buy another Tornoe comic. I write for American Way, which is an inflight magazine of American Airlines, and I got notice about their bankruptcy and then recent merger with US Airways, even though the magazines didn’t owe me any money.
I was relieved that this was the answer to Tornoe’s mystery, because if every single person in the state of N.J. was told they were a creditor in Revel’s bankruptcy, I believe “mass hysteria” wouldn’t come close to covering the reaction. Of course, the tax rebate issue stinks for those of us who live in N.J. Gov. Christie gave them that assuming that Revel would bring in more than enough in gaming revenues to cover the difference, which has not happened. Not only have they declared bankruptcy, but Revel keeps finishing near the bottom of the pile in monthly take. In fact, casino operating profits dropped 28% in 2012.
None of this is good news, but at least we’re not deal with state-wide panic – and Tornoe’s connection to Revel’s bankruptcy has been found.
Jen A. Miller writes the Down the Shore with Jen blog for NewsWorks.org. Jen is author of The Jersey Shore: Atlantic City to Cape May, which is now in its second edition.