Michael Bathon, Bloomberg
Revel AC Inc.’s $95.4 million sale to developer Glenn Straub remains in flux as a federal judge weighs creditors’ pleas to halt a bankruptcy court’s ruling approving the deal, saying it will strip them of rights.
Revel’s creditors including its energy provider, ACR Energy Partners LLC, and tenants of the shuttered Atlantic City casino resort, spent hours Tuesday trying to persuade U.S. District Judge Jerome B. Simandle in Camden, New Jersey, to block the sale while they seek an appeal. Simandle said he would issue a written ruling Wednesday.
The appeals may jeopardize the sale because Straub might be able to “cut his losses” and walk away, forfeiting his $10 million deposit, his attorney, Stuart Moskovitz, told the judge. The creditors argue they will be “irreparably harmed” by the deal because Straub intends to reject all contracts and leases under the terms of the sale, which would be free of all claims and liens as well.
“What my client needs is the freedom to redo the entire concept” of the Revel, Moskovitz said at the hearing, saying it’s highly unlikely the resort would be demolished. Revel could still have a casino, integrate with the boardwalk, have a water park or a university, and could employ about 4,000 workers, he said.
If the sale is stayed and the creditors seek to impose their purported rights on the buyer, Straub might drop his bid, Moskovitz told Simandle. “My client would say, ‘I’d rather lose $10 million now than bleed $5, 6, 7 million a month for the next 3 years’,” Moskovitz said.
Negotiation Advantage
If the sale isn’t put on hold then Straub would have an advantage in negotiations with ACR, said Craig Martin, a lawyer for the energy provider whose sole customer is Revel.
Straub’s Polo North Country Club Inc. would be “holding a hammer over the tenants head” and could evict them at anytime, Martin told the judge.
ACR, which invested about $160 million to build the facility, is Revel’s only source for energy, leading the judge to say he “can’t foresee a situation where Polo would issue that eviction notice.”
Revel, which opened in April 2012 at a cost of $2.4 billion, was the first new Atlantic City casino since 2003. The bankruptcy, its second, and subsequent closing last September eliminated more than 3,000 jobs.
Sale Approval
The closed casino-resort won bankruptcy court approval Jan. 5 to sell its Atlantic City, New Jersey, property to Polo, the original bidder, for $95.4 million, after an earlier sale at a higher price fell apart.
Revel was one of four casinos that closed last year after New Jersey’s gambling center saw its dominance fade amid growing competition from game rooms in neighboring states. Casino revenue in Atlantic City fell more than 40 percent to about $2.8 billion in 2013 from a peak of more than $5 billion in 2006.
The bankruptcy is In re Revel AC Inc., 14-bk-22654, U.S. Bankruptcy Court, District of New Jersey (Camden). The Appeals are In re ACR Energy Partners LLC v. Revel AC Inc., 15-cv-302, American Cut AC Marc Forgione LLC v. Revel AC Inc., 15-cv-352, IDEA Boardwalk LLC v. Revel AC Inc., 15-cv-299, IGT v. Revel AC Inc., 15-cv-317, all in U.S. District Court, District of New Jersey (Camden).
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