A lawsuit has been filed against the owners of the Revel Atlantic City power plant, which has been at the center of the Revel casino’s closing and its inability to re-open since day one.
Bondholders for the plant say they were cheated when the plant’s owners lied about the status of the bonds they were buying. They also have asked the court to prohibit ACR Energy Partners from selling the power plant to anyone but them.
According to the Associated Press, the lawsuit was filed by two investment funds, Rosemawr Municipal Partners Fund and Rosemawr Capital I. The suit accuses ACR of hiding the fact that it had defaulted numerous times on its financial obligations.
They further contend that the two firms would not have bought $35 million worth of bonds for the plant, or would have done so at a much lower price, had they known the true status of the bonds.
ACR Energy did not respond to the suit.
The bonds quickly lost 70 percent of their value after the purchase, according to the lawsuit.
“Defendants fraudulently misrepresented—indeed, flatly lied about—material matters and purposefully concealed information that they knew was material to plaintiffs and the other bondholders in order to enrich themselves,” the funds wrote in their lawsuit, filed in U.S. District Court on Sept. 16.
Revel’s power plant was cited as a major cause for the casino shutting down in 2014 due to its high energy and construction costs, which Revel’s original owners agreed to pay. When the site was successfully sold to developer Glenn Straub, he immediately got into a protracted legal fight with ACR over energy costs.
Straub has tried to circumvent using the plant’s power, but has been forced to by New Jersey to keep fire suppression systems working at the closed casino tower. Still, the legal fight has kept Straub from re-opening the building.
