3rd round of bids, lower price possible for ex-Revel casino

AP News
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Posted: Feb 11, 2015 1:14 PM

CAMDEN, N.J. (AP) — A third round of bidding — and an even lower purchase price — for Atlantic City's former Revel Casino Hotel could be in the offing following a court ruling Wednesday that did little to clarify the future of the star-crossed and shuttered casino.

U.S. Bankruptcy Court Judge Gloria Burns refused to extend the deadline for the casino to be sold to Florida developer Glenn Straub now that Monday's deadline had passed. But she did not rule on a request by the casino's owners, Revel AC, to approve their termination of the $95.4 million sale to Straub's Polo North Country Club, and the casino's intention to keep Straub's $10 million deposit.

The judge said she'll decide next Tuesday whether to grant that request.

Revel attorney John Cunningham said it's likely the company will seek a third potential buyer for the casino, which cost $2.4 billion to build, never turned a profit and closed Sept. 2 after just over two years of operation.

"We're ready to move on from Polo North," he said. "We're ready to find a new buyer. We have zero confidence in Polo North's ability to close."

Straub's attorney, Stuart Moskovitz, said he remains willing to close as soon as issues involving the legal rights of former tenants at the casino, including nightclubs and restaurants, as well as a power plant that provides all Revel's utility services, can be decided.

"We were anxious to move forward, and we still are," Moskovitz said. "We are anxious to close as quickly as possible, but we need to know what we're closing on."

Burns said that if she approves Revel's termination of the deal, bidders including Straub would be free to submit new, presumably lower offers for the casino. Moskovitz said that remains a possibility.

"If we can buy this for $40 million instead of $95.4 million, why not?" he said after the hearing had concluded.

In the hallway outside court, Straub complained to Cunningham about the latest turn of events, suggesting his time and money could be better spent elsewhere.

"Are we investing in Miami and spending $2 billion there?" he asked. Then referring to difficulties with the proposed Revel deal, he asked, "Why do we want to deal with $15 million in legal fees, power being shut off? What you guys are doing is affecting a lot of people's lives."

One of the big obstacles to the completion of the deal is unpaid bills and debt from the construction of Revel's power plant. ACR Energy Partners is threatening to cut off utility service to the building unless it is assured it will be paid. That issue led the previous purchaser, Toronto-based Brookfield Asset Management, to scrap its deal to buy Revel for $110 million in November.

Robert Schechter, an attorney for many of the former Revel business tenants, urged the judge to get a sale done that protects their $16 million investment.

"The debtors have two strikes now on the sale process," he said. "We suggest they should not be permitted to move to three."

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