September 23, 2016

UPDATE: Atlantic City’s MUA Seeks Bankruptcy Advisor To Tackle Casino Trustee’s Claims

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This story was updated on Monday Sept. 26 to include new information in the first three paragraphs and other details from an interview with the MUA’s executive director.

Atlantic City’s Municipal Utilities Authority (MUA) is seeking bankruptcy counsel, according to a request for qualifications published on the authority’s website on Friday.

The MUA is seeking legal advice after it was sued by the trustee supervising the bankruptcy of Trump Plaza and Trump Taj Mahal casinos, the water authority’s executive director Bruce Ward said on Monday. The MUA was a vendor to the casinos and the legal action is part of a typical bankrupcty process, Ward said.

Later on Monday, the MUA and Atlantic City Council are scheduled to make a “major announcement” about the future of the authority, which has been named as collateral in the $73 million emergency loan that a state agency made to the struggling city earlier this year.  City Council this month failed to agree on a plan for the future of the profitable authority, triggering a clause in the loan agreement and opening the door to a state takeover of the city. The city has until Oct. 3 to comply with the terms of the state’s emergency loan, the Press of Atlantic City reported on Friday.

The MUA contributed almost $700,000 to the city’s coffers last year and it has been valued at about $100 million by financial advisers. In the past, Atlantic County and other entities have expressed interest in taking over the city’s water authority.

Regarding the request-for-qualifications for a bankruptcy counsel, the authority has requested that interested parties submit paperwork by Oct. 17 at 11am. “The successful Respondent must have significant experience in providing legal services to New Jersey municipalities and/or other New Jersey public entities facing major institutional challenges,” the document, available here, says.


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