According to a filing within the Securities and Exchange Commission on Friday, Empire Resorts is considering a voluntary prepacked Chapter 11 bankruptcy filing. The parent company of Resorts World Catskills Casino saw a loss in the second quarter of this year of just over $35 million from revenues of $60.07 million. Operating expenses for the company came in at just under $80 million.
The consideration comes at a time when the company has seen continual losses. For the first six months of 2019, Empire has recorded losses of just over $73 million. Since the New York casino opened in February of last year to the end of June, the casino has lost $211.5 million.
Gross gaming revenues did not come in as projected, with the company logging in at around 45% below the projections for the first year.
If Empire Resorts chooses a prepackaged bankruptcy filing, the process would be accelerated. The company and their creditors would need to come to an agreement on a plan of financial reorganization before the filing would be submitted for approval by the court.
According to the filing on Friday, a prepackaged option is their only choice to avoid breaching their debt covenants if they file for Chapter 11. The company has stated that if they are unable to restructure their debt and additional obligations then enough cash and working capital will may not be available to fund their operations.
K.T. Lim, a casino magnate, would like to buy the outstanding shares of the company to save it. Lim’s family trust Kien Haut Realty already owns 86% of Empire. If an acquisition were to be made, it would make the process of bankruptcy much simpler. As the negotiating process of debt would only be conducted with the one entity.
Lim stated on Monday that he would like to take control of the casino company and work with his gaming company Genting Malaysia to create a holding company that would buy the stock of Empire for $9.74 per share.
On Monday, Genting Malaysia agreed to buy 46% of the Empire Stake of the Lim family at a cost of just over $128 million.
Lim has stated that he would like to bring more electronic games to help bring in revenues. The Resorts World Catskills also has plans to bring in sports betting, which should help to bring in new revenues for the facility.
Monticello Raceway Closure:
The news of Empire’s potential bankruptcy filing comes just a few months after the company announced the closure of the Monticello Raceway in New York. The venue closed in April, with news of the change announced in January.
The closure was part of consolidation efforts with Resorts World Catskills.