A bankruptcy court judge has allowed Revel Atlantic City to scrap a deal with Canadian firm Brookfield Asset Management. Revel Entertainment, which owns the closed casino, wants to pursue a deal with the runner-up in the property’s bankruptcy auction, Florida-based developer Glenn Straub.
Straub, who bid $95 million for the $2.4 billion property, lost the auction to Brookfield, which bid $110 million, but immediately challenged the results in court, saying that the auction was not held properly.
But the issue may have become moot when Brookfield was unable to reach a deal with the company that provides energy to the Revel tower and walked away from the deal. The company has since missed a November 28 deadline to close the deal.
The separately owned Revel power plant has been a costly burden on the property and was seen as a major reason for the casino’s failure.
ACR Energy Partners helped build the plant with $118.6 million in municipal bonds and an about $40 million equity investment. The casino’s 20-year energy contract with ACR required Revel to repay the bond debt with about 11.6 percent interest on average. The equity investment had to be repaid with 15 percent – 18 percent interest.
U.S. Bankruptcy Judge Gloria Burns set a date of January 9 to consider the Straub purchase. Revel was also permitted to keep the $11 million down payment made by Brookfield.
Spokesmen for Brookfield, Straub and Revel all declined to comment to the Associated Press.
Straub told the Press of Atlantic City that his legal team would not attend the hearing and that he is not sure who will eventually buy the casino.
“This is a crapshoot,” he said.
Straub has proposed several uses for the former casino resort including creating a so-called “genius academy” to work on solving world problems.
The $2.4 billion Revel opened in April 2012, but was never profitable and closed in September.
