Tenants hoping to re-open at the closed Revel casino in Atlantic City have won the right to access their businesses and work to try and resume operations.
A bankruptcy judge has ruled that Revel owner Polo North Country Club Inc. must allow the tenants to access the property “to preserve physical assets, as well as to investigate, plan, and take the necessary steps to restart operations.”
The tenants, including restaurants and the popular HQ Nightclub, have been fighting to re-open at the site since the casino closed last year.
Polo North, led by developer Glenn Straub, eventually bought the casino through bankruptcy proceedings, but tried to reject the leases between the tenants and the casino’s former owner.
The ruling, however, means the tenants maintain basic rights of access to the leased space under bankruptcy law. Those “possessory rights” include “access to utilities for operation, including electricity, hot and cold water, plumbing, gas, internet, cable and telephone service,” U.S. Bankruptcy Judge Michael Kaplan ruled.
In a statement for IDEA Boardwalk LLC, which owns HQ, attorney Barry Roy said the company is “extremely pleased with the decision.”
“IDEA is now going to take the necessary steps to comply with the various city and state agencies to allow for the reopening of HQ,” he said.
That opening, however, could be complicated by the ongoing saga between Straub and ACR Energy Partners, which owns the power plant that supplies the property with electricity. Straub and ACR have been in an extensive legal fight as the developer has balked at paying for the ACR plant’s construction which was part of ACR’s previous deal with Revel.
Straub has said he wants to find an alternate energy provider, though ACR is providing power to the building under a temporary agreement.
However, in another court, an attorney for The Bank of New York Mellon said ACR is on the verge of collapse.
The bank, which represents bondholders holding about $119 in municipal bonds used by ACR to build the plant for Revel, wants the judge’s permission to intervene in ACR’s ongoing court battle with Polo North.
ACR has defaulted on the bonds, which are secured by the plant, the bank said in a court filing last week.
Under the temporary arrangement, ACR is providing limited power to the building, and Straub is paying the bank. But the bank says ACR is not being paid the full rate, and as a result, is operating at a loss.
The bank says ACR is operating only by drawing on the bank’s collateral, which may soon be cut off. The bank’s need to participate directly in the case “to protect its collateral is increasingly acute,” it said.
Meanwhile, the original owners of the property, Revel Inc., won approval from Kaplan to bring their bankruptcy plan to a close.
Kaplan approved Revel’s bankruptcy liquidation plan and settlements reached last week that resolved the last remaining creditor opposition.
“The Revel needs to be buried. I do not intend to leave a carcass out there to be gnawed at and picked at,” and putting it to rest will allow Atlantic City to begin healing, Kaplan said. “This is the best outcome I can conceive.”
Revel, for its part, has reached a settlement with ACR for $3.3 million. ACR had claimed it was owed more than $20 million for utility service and sought to have the bankruptcy converted to a Chapter 7 liquidation, which would strip the company of control over its case.
Revel opened in 2012 at a cost of $2.4 billion, but was ultimately sold to Polo North for $82 million.
