Deadline passed, Revel sale to be killed Tuesday morning

AP News
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Posted: Feb 10, 2015 12:48 AM
Deadline passed, Revel sale to be killed Tuesday morning

CAMDEN, N.J. (AP) — The owners of Atlantic City's Revel Casino Hotel say they will cancel a deal Tuesday morning to sell it to a Florida developer.

Revel AC originally said it planned to scrap a deal to sell the shuttered casino to Glenn Straub for $95.4 million at 12:01 a.m., just after the midnight deadline for the sale had passed. But a Revel attorney told The Associated Press moments after the deadline had passed that the termination notice, in the form of a request to a bankruptcy court judge to let it cancel the deal, will be filed sometime during business hours Tuesday morning.

"We do not plan to file that until the morning," attorney Michael Viscount said. "The court is not going to read or act on any such thing at this hour."

The collapse of the Straub deal would mark the second time in the last three months a buyer has been unable to complete a purchase of the star-crossed casino, which cost $2.4 billion to build, never turned a profit, and closed on Sept. 2, 2014 after just over two years of operation. In November, Toronto-based Brookfield Asset Management pulled out of a deal to buy Revel for $110 million.

"We need to come up with a Plan C really quickly," Viscount said.

Straub wants a bankruptcy court judge to approve an extension of the sale deadline to Feb. 28; a hearing on that request is scheduled for Wednesday morning.

His attorney, Stuart Moskovitz, said Revel does not have the legal right to terminate the deal and keep Straub's $10 million deposit.

"If Revel terminates this contract, it will cost them tens of millions of dollars," he told the AP "They will never get a bid at these numbers. From Day One, Revel was a disaster, in every way imaginable."

The apparent demise of the deal came after U.S. District Court Judge Jerome Simandle refused to let the proposed sale go through without taking into account the legal rights of a nightclub and restaurants at the former casino, as well as its utility provider, all of which are appealing a previous court ruling that the sale can go forward "free and clear" of their leases.

The judge issued a temporary stay on Monday, allowing the sale to proceed but saying it could not do so without taking the appellants' rights into consideration in the purchase. That left Straub unable to close on a deal, according to his lawyer.

"We can't close if we have no idea what we're closing on," Moskovitz said.

The deal had been progressing toward Monday's closing date, until a federal appeals court sided with the tenants late Friday and issued a partial stay of the sale. Monday's continuation of that stay appeared to be the last straw. The judge explicitly said that nothing in his order prevented the sale from closing, but the buyer disagreed.

Last week, the CEO of the Hard Rock franchise obtained preliminary authority to own a casino in Atlantic City, and indicated the company had spoken with Straub about a possible involvement in re-opening Revel. But Viscount said Hard Rock was never interested in buying it.

Straub had proposed re-opening Revel under a different name as a smaller casino, a water park, hotel and condominiums.

Viscount said that by keeping Straub's $10 million deposit, "there's a lot of things we can do to keep the ship afloat for a while."

Revel also kept an $11 million deposit from Brookfield when that deal fell apart.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC