Morgan Stanley backs out of AC casino deal

Morgan Stanley would rather lose $1 billion than continue with its investment in the flailing Atlantic City Revel casino project, the investment bank revealed in a filing yesterday. The bank plans to back out of its stake in Revel Entertainment’s $2.5 billion hotel and casino, which was to be Atlantic City’s tallest building. As the sole financier in 2006, Morgan Stanley had invested $1.2 billion in the 53-story project. Construction began in 2007 but incurred multiple delays when the economy went sour. Morgan Stanley said in the filing that it will now designate the project as a discontinued operation, which could mean a loss of between $800 million and $1 billion. [Post]