The Boardwalk casino - which debuted May 26, 1978 - had not made a payment on its $360 million mortgage since October 2008. On Aug. 14, it filed a petition with the state gambling commission to transfer ownership to its lenders, which include Wells Fargo Bank N.A.
A deal was reached last month that had the lenders agreeing to cancel nearly $381 million in debt in exchange for equity ownership.
Resorts becomes the first Atlantic City gambling hall to be taken over by a lender.
In Las Vegas, banks taking over casino properties has become more common as smaller-size casinos unable to compete and major resort projects under way face increasing difficulty in acquiring the financing they need to continue.
Earlier this year, the tiny Greek Isles Casino was seized by its lender, which foreclosed on it for $47 million.
Last year the proposed Cosmopolitan Casino on the Strip was taken over by Deutsche Bank AG after its developer defaulted on more than $900 million in loans. The bank is currently moving forward with completing the $3 billion-plus project.
Under the deal reached last month, Resorts' owner, Colony Capital L.L.C. of Los Angeles, will cede its interest to co-owner Nicholas Ribis. Ribis will manage the casino, with employs just under 2,200 workers, under a six-month contract that the new owner could renew.
Title to the casino will be conveyed to RAC Atlantic City Holdings L.L.C., a new entity wholly owned by Wells Fargo Bank N.A. as trustee of the securitization trust.
As one of the smallest casinos here, Resorts has struggled against bigger, flashier casinos such as the Borgata and Trump Taj Mahal.
Gambling revenue has been on a steady decline, made worse by new slots parlors opening up in Pennsylvania three years ago.
In October, the latest month for which data are available, Resorts' revenue declined 14.3 percent to $14.4 million, down from $16.8 million a year ago. It was the third largest decrease among the city's 11 casinos.
November revenue are to figures come out today.
Contact staff writer Suzette Parmley at 215-854-2594 or firstname.lastname@example.org.