The sale of Atlantic City’s closed Revel casino has been given the go-ahead by a federal judge who denied a challenge from the casino’s tenants and main power supplier to delay the sale while they challenge its terms.
Glen Straub, a Florida-based developer, can now go forward with his planned $95.4 purchase of the closed casino tower. Straub had threatened to walk away from the sale if the tenant’s challenge had been upheld, but his legal team said Straub’s Polo North Country Club will now try to close the sale by February 7. Straub subsequently told reporters he might abort the deal if the February deadline isn’t met.
“The judge arrived at the right decision and now allows us to go forward and begin doing things necessary to start turning Atlantic City around,” Straub’s lawyer, Stuart Moskovitz told the Associated Press.
The tenants, including restaurants, a nightclub and a power plant, told the court say they could be wiped out if the $95.4 million sale goes through as planned.
U.S. District Court Judge Jerome Simandle, however, denied their motion to put the sale on hold while they appealed the sale’s terms. Simandle noted that blocking the sale would hurt the resort as a whole and leave the $2.4 billion tower left “empty and commercially unproductive.”
“The debtors make palpable claims that a failed sale process … and subsequent liquidation of the debtors’ assets would likely leave the Revel Casino Resort vacant and unused for the foreseeable future—clearly frustrating the bankruptcy proceeding, particularly given the absence of any alternate purchaser waiting in the wings,” Simandle wrote. “The debtors further represent that a failed sale would result in ‘the permanent loss of approximately 4,000 jobs’ and cause ‘substantial detriment to the City of Atlantic City and the surrounding areas.'”
The sale of the casino was approved by a bankruptcy court this month. That ruling allowed for a sale “free and clear of liens, claims, encumbrances and interests.” That means Straub could cancel leases and force them off the property, tenants argued.
Those appealing the decision included ACR Energy Partners; IDEA Boardwalk, which owns the popular HQ club, and many of Revel’s restaurants. Most of the tenants said they could lose everything if evicted.
Simandle noted that there have been losses for all those involved with Revel.
“All I can say is that the bankruptcies of Revel have resulted in many, many, many parties losing very substantial amounts,” the judge said during a hearing on the challenge. “There are a huge number of parties in this case that are losing huge amounts of money because of the fact that Revel failed.”
Straub and his Polo North Country Club actually came in second in a bankruptcy auction for the $2.4 billion casino, but the auction winner—Canadian firm, Brookfield Asset Management—pulled out of a deal to buy the property for $110 million after it couldn’t come to terms with ACR Energy Partners, owners of Revel’s costly power plant.
He has proposed a number of uses for the property including a casino, a water park, condominiums and a hotel.
