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Bankruptcy pushes up profits at Atlantic City Casino

18 March 2001

The Claridge Casino Hotel managed to turn a profit of US$516,000 last year. Unfortunately, the reason it managed to accomplish that was because it was allowed to stop paying interest on US$85 million in bonds when it filed for bankruptcy protection, saving it US$12 million. In fees alone for declaring bankruptcy, the company forked out over US$4.5 million. Excluding reorganization costs and income taxes, the casino reported income of US$4.2 million. In 1999, the company lost US$38.2 million before reorganization items and income taxes of US$531,000. Michael Pollock, publisher of the trade journal Gaming Observer, stated that the Claridge suffered as its hotel was old and located away from the Boardwalk, there was insufficient parking, and it did not enjoy a nationally recognized brand like Harrah''s. Park Place Entertainment has issued an offer to purchase the Claridge. It is believed that the Claridge’s unsecured creditors and bondholders may vote on the deal next month. Claridge management, however, was satisfied with the year’s outcome. Jean Abbott, the Claridge''s executive vice president of finance, said, "We were pleased the operating results improved on a year-to-year basis."

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