After a February 6, 2019, approval of a complex financial deal allowing operations at Ocean Resort Casino to continue uninterrupted during an ownership transition, a pair of top executives at the Atlantic City property were let go on Monday.
The termination of the property’s former Chief Executive Officer, Frank Leone, and now ex-chief financial officer, Alan Greenstein, is on the heels of the unanimous decision by the New Jersey Casino Control Commission approving a divestiture trust agreement that has seen New York-based hedge fund Luxor Capital Group assume majority control of the resort casino from Colorado-based developer, Bruce Deifik.
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According to the Press of Atlantic City…
Replacing Greenstein is Theresa (Terry) Glebocki, who since April 2015, served as chief financial officer for Tropicana Entertainment. Former chief operating officer of the now-shuttered Atlantic Club Casino Hotel, Eric Matejevich, will reportedly succeed Leone on an interim basis.
In a Tuesday statement, the company said…
“As we move forward with enhancements to the guest and player experience — including substantial increases in our entertainment programming and player events throughout the year, adding a world-class buffet, additional suites and rooms, incremental investments on the casino floor and other exciting projects — Terry and Eric’s expertise will be invaluable in continuing our momentum.
“We wish to thank Alan Greenstein for his years of service and wish him success in his future endeavors. We also extend our good wishes to Frank, who will be pursuing other opportunities after having provided important leadership for Ocean Resort Casino,” the company’s statement read.
Deifik’s group, AC Ocean Walk, LLC, acquired Ocean Resort Casino from Florida developer, Glenn Straub, for $229 million in early January 2018, with Luxor Capital Group and JPMorgan Chase Bank being primary lenders for the purchase. Straub acquired the former Revel in bankruptcy in April 2015 for $82 million.
He renamed the casino resort “TEN” despite it never opening. Greenstein and Leone were both part of Straub’s casino plan for his newly-named casino, but it failed to materialize, according to the news agency. Deifik kept the pair of executives on as Ocean Casino Resort officially opened on June 28, 2018, after both it and the Hard Rock Hotel & Casino Atlantic City had soft openings the night prior.
As part of a number of financial conditions placed upon Ocean Resort during its licensing hearing last year were the requirements that it maintain a daily operating cash balance of a minimum of $10 million, as well as a casino bankroll of at least $11 million and direct access to debt and capital service reserves of not less than $15 million, according to an earlier report from the Press of Atlantic City; and to notify the DGE immediately if at any point it fell below the $36 million threshold.
Just months after opening, in October last year, Ocean Resort requested and was granted temporary relief of a $31 million requirement, which was later extended by a month. According to the earlier report, the Atlantic City property had not been in compliance with the state Division of Gaming Enforcement (DGE) requirements since November 2018, ultimately leading to the divestiture trust agreement.
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On January 29 this year, the DGE submitted a report to the state’s Casino Control Commission that detailed just how much Ocean Resort had been losing. Operating losses of $3.2 million were reported by the casino in September, followed by a further $4.1 million loss in October and in November, the operating losses were reported at $5.5 million. Lastly, from January 1 through the 24, Ocean Resort reported $4.1 million in operating losses, according to the February 2, 2018 news report.
Within just a matter of months, gaming revenue at the casino was every month ranking either last or very close to last of Atlantic City’s nine operating casinos.
Late last month, Ocean Resort Casino and Luxor Capital Group announced the change of management, with plans for a $70 million investment in the Boardwalk property.
The divestiture agreement was approved on February 6, 2019, by state gaming regulators and Matejevich was named trustee of said agreement.