A federal bankruptcy judge in Camden on Monday approved a modified incentive plan for key employees of the bankrupt Atlantic Club Hotel & Casino, which is expected to be auctioned Tuesday.
The revised incentive plan, hammered out between the Atlantic Club and unsecured creditors over the weekend, kept the $25 million minimum price required for the payment of any bonus, but it reduced the minimum aggregate payout to executives to $250,000 from $875,000.
If the property, Atlantic City's smallest casino, sells for $27.5 million, the seven managers will split $550,000. If it sells for $30 million, they will share $900,000, a lawyer for Atlantic Club said at a hearing Monday.
The $25 million threshold price is "a stretch," testified Scott Farnsworth, an investment banker with Imperial Capital hired to sell the casino. Farnsworth said that two "expressions of interest" in the casino, which has had annual operating losses in the range of $20 million, topped out at $23.5 million last month.
Farnsworth said that in recent days he had heard again from the company that considered paying $23.5 million. "The number was significantly below the number discussed in November," he said.
Bids on the casino are due at 4 p.m.