Atlantic City, N.J. has hired McManimon Scotland & Baumann as bond counsel in an effort to avoid a state takeover.
The city council approved the contract with the Roseland, N.J.-based firm in a 6-3 vote at its June 8 meeting.
Joseph Baumann, chairman of the law firm, said a big focus will be on refinancing or restructuring the city's $240 million bonded debt as well as $170 million in tax refunds owed to the Borgata casino. The city is paying the firm $180,000, according to Baumann, who said its experience working with other distressed New Jersey municipalities including Newark, Paterson and Harrison should prove beneficial for the struggling gambling hub.
"We will be involved in looking to address all of their debt issues," said Baumann. "We're looking forward to the challenge and hope we can make a difference."
Atlantic City received a $60 million bridge loan as part of a rescue package approved by New Jersey lawmakers after barely averting a default of its May debt service payments. The legislation provides Atlantic City five months to balance a more than $80 million budget deficit and prepare a sustainable five-year financial plan or face state intervention that allows New Jersey's Local Finance Board to alter outstanding debt and municipal contracts.
The city's bonds are rated at CC by Standard & Poor's and Caa3 by Moody's Investors Service.