Revel Atlantic City is still not sold.
At a bankruptcy court hearing last week, Judge Gloria Burns said she did not have the jurisdiction to approve a sale. Revel has been approved for sale twice before and one of those sale orders was appealed to federal court by the property’s tenants.
Burns says she will have to wait for that appeal to play out.
The denial means that Florida-develop Glenn Straub, who was making his second attempt to buy the closed casino, is still without a deal. Straub was trying to buy the casino for $82 million after failing to close on a $95.4 million offer earlier this year.
Straub testified before Burns, delivering what published reports called a lengthy, rambling and at time incoherent explanation of his thoughts on the sale.
Ultimately, however, he said, “I don’t think I’m going to walk away from $82 million.”
Concerns of the tenants, which include a popular restaurant and nightclub, continue to halt the sale. The tenants are trying to protect about $16 million in capital improvements they were required to make at the property and protect their leases to operate.
In an earlier approval, Burns had ruled that Straub could buy the property free of the leases. That has been appealed to federal court and an appeals judge has issued an order that the property cannot be sold without considering the tenant’s position while that case plays out.
Since the new sale order would be a modification of the previous sale order—with the price dropped from $95.4 million to $82 million—Burns has concerns on whether she can proceed while it is being appealed.
Warren Martin, an attorney for tenants, also objected to the Straub deal saying that Straub’s history and actions indicated that he was not a “good faith” bidder qualified to take possession of the property.
The appeal also could delay Straub from closing on the property by a March 31 deadline, even though he has put the full $82 million for the sale in escrow.
Also complicating things are challenges to the sale by the property’s energy supplier ACR Energy, which is seeking back energy payments and wants a financing deal for the plant’s construction honored.
As if that’s not enough, a number of interested buyers have also reportedly come forward at the last minute that also want to bid on the property, though Revel attorneys told Burns that they have only firm bid in hand from Straub.
Even if Burns approves the $82 million sale, the contract allows Revel to accept a better offer if one is made before the closing date.
Potential bidders are Los Angeles developer Izek Shomof, whose DTLA company tentatively offered $80 million for the property, but then but ran into difficulties with ACR Energy according to Philly.com. They have not submitted an official bid.
As many as 19 other bidders have been said to be interested in the property.
Stuart Brown, attorney for ACR, said the energy plant could still make deals with other bidders in the next week, but also questioned the jurisdiction of the bankruptcy court with other appeals also taking place in U.S. District Court.
Finally, Tom Kreller, attorney for Wells Fargo, which is financing the bankruptcy process, told the judge “There is no more time” and asked the judge to approve the sale.
“Right now, there is nothing else out there,” he told the judge. “The $82 million is the bird in the hand. Quite frankly, there is nothing in the bush.”
Revel attorney John Cunningham also urged the judge not to wait for potential offers from “illusory buyers” who have not put up any money.
“We can’t send this estate down the rabbit hole of no buyer, no purchaser, just a total train wreck,” he said.
