The saga of Atlantic City’s closed Revel casino continues as once again a sale of the property has not been made.
U.S. bankruptcy Judge Gloria Burns did not approve what seemed like a done $82 million deal to sell the property to Florida developer Glenn Straub after the possibility of another offer for the property came to light.
“I think in order for me to be comfortable with this you need to satisfy me that every stone has been overturned to find the best deal,” Burns said at hearing to consider Straub’s purchase.
Burns delayed consideration of the sale for one week.
Revel officials had asked Burns to approve the sale to Straub. It’s the second time Revel and Straub have tried to close on a deal, with this current offer having a March 31 closing deadline.
The decision comes after a possible offer for the property from Los Angeles developer, Izek Shomof, came to light. Shomof’s lawyers told Burns that the developer could offer more for the property than Straub.
Shomof’s real estate firm DTLA Development Group, has made an $80 million offer for the property—which cost $2.4 billion to build—saying their bid is actually better for Revel since they would collect the sale price and could keep a $10 million deposit made by Straub.
Shomof’s lawyer asked Burns to delay the sale and also charged that the current sale process was unfair. Shomof says he was barred from performing due diligence and says Straub had threatened to sue him for interfering with the Revel sale.
Revel officials asked Burns to approve the certain sale to Straub, rather than continue the hunt for other offers.
“There are “82 million reasons” for it to be approved, Revel attorney John Cunningham told the judge.
Straub has already placed the $82 million purchase price in escrow, he said.
Revel officials also said that Wells Fargo, which is behind the loan financing the bankruptcy, may back out if there is yet another delay on the sale.
“Then maybe a conversion to a Chapter 7 is the right way to go,” Burns said.
A chapter 11 bankruptcy allows for a reorganization while a Chapter 7 bankruptcy involves liquidation of the property.
The sale to Straub is also being challenged by Revel’s tenants, including its restaurants and power supplier. The tenants feel the sale to Straub will destroy their investment in the property and the energy provider, ACR energy is seeking about $30 million in unpaid financing and power bills.
Prior to the hearing, Shomof and some of his partners were in Atlantic City. Though he did not tour Revel, ACR gave him a tour of the power plant.
“We just want to reactivate the property and figure it out piece by piece,” Shomof told Philly.com, thee website for the Philadelphia Inquirer. “We’ve had reasonable success in acquiring properties in similar situations in Los Angeles, taking properties that were hemorrhaging cash and stabilizing them and turning them around. We would like to do nothing different here.”
