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Atlantic City to get emergency manager to tackle financial crisis

New Jersey governor is set to hire an emergency manager to deal with financial decline, after four out of 12 casinos closed in 2014
Reuters

Reuters –New Jersey Governor Chris Christie will install an emergency manager in Atlantic City to assume control of the struggling gambling hub, the Wall Street Journal reported on Thursday.

The Journal, citing an unnamed senior administration official, reported that Christie is expected to announce hiring corporate restructuring attorney Kevin Lavin to handle the city's strained finances and daily operations on Thursday.

The Journal also said Christie would bring in Kevyn Orr, the restructuring lawyer who led Detroit through its bankruptcy as the city's emergency manager, as a part-time consultant to the recovery effort.

Reuters could not independently verify the report. Representatives for the Christie administration did not immediately respond to request for comment.

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Atlantic City lawmakers earlier this month endorsed steep budget cuts, but rejected the idea of a state-appointed emergency manager in favor of local control of the city's budget and hiring decisions.

The city has seen its municipal finances decline with the fortunes of its local casino industry, which has suffered steep losses from competing casinos in nearby states. According to city figures, casinos in the past paid roughly 75 percent of the city's property taxes.

Four of the city's twelve casinos closed in 2014. A fifth, Trump Entertainment's Taj Mahal, narrowly averted closing and remains in bankruptcy. Caesars Entertainment, the owner of three other casinos in Atlantic City, has said it could file for bankruptcy in mid-January.

Stabilizing the city's budget has been the focus of major summits backed by Christie and leaders in the state legislature.

The Journal reported that Atlantic City Mayor Don Guardian would oppose the move, citing mayor spokesman Chris Filiciello.

Representatives for Guardian could not be immediately reached.

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