$25 Million Pension Liability May Block Atlantic City Hilton Casino Resort SaleSeptember 21, 2011 – In The News
The prospective sale of the Atlantic City Hilton Casino Resort Hilton could be hindered by the $25 million in unfunded retirement benefits incurred by the casino hotel. This means any buyer interested would have to assume responsibility for the fund in addition to the price of the casino hotel, and although the price hasn't been revealed, gaming analysts say it is in the $30 million range.
Michael Viscount said the pension liability may very well be a deal killer.
"I think that is the major impediment for the sale, next to the market," said Viscount, also referring to the slumping Atlantic City economy.
Viscount believes the Hilton's current owner, Colony Capital LLC, is trying to rid itself of the pension liability and other financial obligations connected to the casino by pursuing a "stock sale" for the property.
Viscount said the Hilton's buyer would have to pay millions more just to remove the Hilton signs and come up with a new name and brand for the casino--adding to the difficulty of the purchase.