The bankruptcy filing of Atlantic City’s newest casino has meant an opportunity for local bankruptcy lawyers to get their hands on one of the region’s most watched filings — and, in some instances, charge more than $1,000 an hour for the privilege.
While Kirkland & Ellis did much of the lead-up work preparing for Revel AC Inc.’s prepackaged bankruptcy, it brought on a team of lawyers from Philadelphia-based Klehr Harrison Harvey Branzburg to serve as co-counsel to the debtor.
Klehr Harrison’s founding member and bankruptcy group co-chairman, Morton Branzburg, is leading his firm’s efforts on behalf of the debtor along with Wilmington, Del., bankruptcy partner Domenic Pacitti and Cherry Hill bankruptcy partner Carol Ann Slocum.
According to a filing with the court Tuesday, Branzburg will charge $650 an hour, Pacitti $550 an hour and Slocum $475 an hour.
Klehr Harrison had been paid a $100,000 retainer from Revel, nearly $80,000 of which was spent prior to the bankruptcy filing March 25.
In its application to represent the debtors filed Tuesday, Kirkland & Ellis said partners working on the case would charge $655 to $1,150 an hour, of counsel $450 to $1,150 an hour and associates $430 to $790 an hour.
Kirkland & Ellis partner Marc Kieselstein will lead his firm’s efforts on the matter and charge $1,025 an hour for his services. Partner Nicole Greenblatt will charge $840 and associate Christopher Greco $715. In February, Revel paid Kirkland & Ellis two retainer fees totaling $1 million.
Revel is also seeking to hire Brown Rudnick as special corporate counsel. Brown Rudnick had represented Revel prior to the filing on contract negotiations and general corporate matters.
Brown Rudnick partners working on the bankruptcy will charge $615 to $1,100 an hour and associates $475 to $685 an hour, according to the firm’s application filed Tuesday.
William Baldiga, managing director of Brown Rudnick’s litigation and restructuring department, will charge $1,045 an hour and real estate partner Paul Laudano will charge $670, according to the filing. Prior to the bankruptcy filing, Revel paid Brown Rudnick nearly $270,000 in bankruptcy-related work.
Klehr Harrison’s bankruptcy team has worked with Kirkland & Ellis in similar capacities before, mainly in Delaware, Branzburg said. When his firm heard Kirkland was looking for local counsel on the Revel deal, Branzburg said Klehr Harrison threw its name into the mix.
He said there wasn’t a formal RFP process by which Kirkland & Ellis selected co-counsel, but he said there were a number of potential firms in the running.
"This is one of the larger [bankruptcies] for South Jersey in a while, but South Jersey has handled a number of casino bankruptcies," Branzburg said of filing the case in the U.S. Bankruptcy Court for the District of New Jersey. "It’s kind of the natural fit for the Atlantic City casinos. It makes sense to have courts with expertise in that area handle the cases."
Branzburg said Kirkland & Ellis and Revel worked hard prior to the bankruptcy filing to get as many constituents on board as possible in this prepackaged bankruptcy, which includes a reorganization plan upon filing that is essentially agreed to by the bulk of the creditors.
That means the bankruptcy case should run more smoothly than a typical filing, Branzburg said. He said the matter is expected to conclude by Memorial Day.
On the other side of the case, Paul, Weiss, Rifkind, Wharton & Garrison is representing the steering committee of Revel lenders along with co-counsel Fox Rothschild.
Bankruptcy partner Michael Viscount, who practices in Fox Rothschild’s Atlantic City office, is working on the matter with the chairman of the firm’s gaming practice, partner Nicholas Casiello Jr., and gaming counsel Patrick Madamba Jr.
Casiello was initially called in prior to the bankruptcy as regulatory counsel by one of the main Revel lenders when the parties agreed to a second amendment to the credit agreement December 27, 2012.
"Through that we were asked to be regulatory counsel to what became the steering committee of lenders," Casiello said.
"Then when it became apparent that a bankruptcy filing was going to be necessary, some local due diligence was necessary and we performed that local due diligence, and then, when the decision was made to file the bankruptcy in New Jersey, Paul Weiss … and the committee retained us to be co-counsel," he said.
Viscount and Madamba handled local due diligence work and are now leading the firm’s bankruptcy work. Casiello is focused on the regulatory side, he said.
Because the steering committee represents a majority of the amount of the debt, it is also involved in the exit financing and has signed on to the pre-packaged reorganization plan. Casiello said this bankruptcy is, as with many pre-packaged deals, much easier to handle.
The New Jersey State Bar Association pulled its annual meeting from Revel and hired Ballard Spahr to deal with any potential damages claims stemming from its decision. •