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

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.

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What’s The Deal With Atlantic City’s Municipal Utilities Authority?

Remember when Atlantic City needed to borrow $73 million from the state to pay its bills? Well, the Queen of Resorts got her money, but it came with a few strings attached. One involves Atlantic City’s Municipal Utilities Authority, which provides water to more than 8,000 residents, businesses and vacation-home owners.  

The small print of the loan creates a Catch-22 situation for the city and the water authority.  The loan says Atlantic City’s Council must agree by September 15 to an ordinance that would hand over the water authority, in the event the city is unable to pay back the loan. But the loan also says that if City Council can’t agree on that ordinance before September 15, it could wind up handing over the water authority’s assets anyway, since it would be violating its borrowing terms. And some people worry that if the city agrees to the ordinance, it will give the state a chance to seize the water authority assets anyway, even if the city follows the terms of the agreement.

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