Potential Revel casino buyer wants discount

AP News
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Posted: Dec 25, 2014 2:22 PM

ATLANTIC CITY, N.J. (AP) — The Florida developer in line to purchase the former Revel Casino Hotel in Atlantic City says in court filings that the auction for the property wasn't run fairly and he wants an $8 million discount.

Lawyers for Glenn Straub said in a court filing Wednesday that the property should be sold for $87 million, not the $95.4 million runner-up bid his Polo North Country Club put in at auction.

Toronto-based Brookfield Asset Management won the auction for $110 million but backed out of the deal when it couldn't resolve a dispute over debt from the casino's costly power plant. A judge is scheduled to consider Revel's request to sell the casino to Straub on Jan. 5.

Straub says in the filing that he believes the auction was unfair because his side wasn't properly notified of the other bidder. He said he wouldn't have bid more than his original $90 million "stalking horse" bid that set the floor price for the auction if he knew about what he described as "significant and numerous improprieties" in the bidding process.

He also wants Judge Gloria Burns to deduct a $3 million breakup fee he was originally promised because Revel is keeping Brookfield's $11 million deposit.

The filing said Revel should be put up for auction again and he should get his deposit back if the judge finds that "the auction process was deficient to the extent the auction significantly and adversely affected" Revel's ability to receive the highest bid.

Straub's filing says White and Case, the law firm running the sale, also represented Brookfield, and the firm was allowed to "dictate the terms" of the auction.

White and Case attorney John Cunningham wasn't immediately available to comment Thursday.

Straub has proposed several uses for the former casino resort. One of them was a so-called genius academy at which the world's best minds would look for solutions to society's problems.

The $2.4 billion Revel opened in April 2012 with high hopes of helping turn around Atlantic City's struggling casino market. But it never turned a profit, filed for bankruptcy twice and closed Sept. 2.

It was one of four Atlantic City casinos to shut down this year amid growing competition in the saturated Northeastern U.S. market. A fifth, the Trump Tal Mahal, averted being closed this year after investor Carl Icahn put up $20 million to keep it running through bankruptcy.