It’s not always the greatest news about famous and glorious casinos, especially not for Revel Casino in the past few months. Mere weeks after he formulated an exceptionally ambitious plan to bring Atlantic City back to its former glory, real estate investor Glenn Straub’s $95.4 million deal to buy the bankrupted Revel Hotel and Casino is in serious doubt. After a New Jersey bankruptcy judge dismissed a request to extend the deal’s deadline, the future of the Revel, which remains infamous as one of the most spectacular real estate failures of all times, is once again in question. While an outright termination of the sale hasn’t played out just yet, most observers are in agreement that excessive turbulence and setbacks will likely spell the eventual death of the deal.
In the past week, an assortment of court rulings have muddied the existing terms of the deal. The biggest obstacles to the closing has been remaining unpaid bills and debt from the construction of the complex’s power plant. Without assurance of payment from the new buyer, the site’s energy supplier continues to threaten disconnection of utility service.
With new conditions favoring the resort’s former tenants and creditors, Straub deemed that an extension of the closing deadline, from February 9 to February 28, would be needed to review the new details. Unfortunately for the Florida developer, Judge Gloria Burns of the U.S. Bankruptcy Court in Camden, N.J. saw things differently.
“Every party that has appeared before the court today has asked the court not to grant the extension,” Judge Burns said during Wednesday’s hearing. “The contract speaks for itself; the time has expired.”
Stuart Moskovitz, a lawyer representing Straub, expressed his displeasure with the decision, “We are anxious to close as quickly as possible, but we need to know what we’re closing on,” he said. Moskovitz also highlighted the fact that the extension would require much less time than completing a new deal, which could prove to be extremely costly to Revel’s creditors.
If Judge Burns decides to terminate the deal next week, as expected, Revel will be open to begin discussions with other potential buyers. According to a person with knowledge of the sale process, there are at least two other buyers that have expressed interest in the 47-story hotel and casino complex.
Revel attorney John Cunningham noted that it’s very likely that the company will seek a third potential buyer for the casino. If the deal is terminated as expected, bidders, including Straub, would be free to submit new, lower offers for the property. Representatives of Straub insisted that a new deal is a major possibility. “If we can buy this for $40 million instead of $95.4 million, why not?” said Moskovitz following the hearing.
As a second potential deal appears to be on its way to termination, former Revel business tenants are beginning to get antsy regarding their unpaid investments, which stem from the $2.4 billion construction of the complex. Attorneys representing the tenants were decisive in urging the judge to get a sale done quickly.
“The debtors have two strikes now on the sale process,” said Robert Schechter, an attorney for many of the former Revel tenants. “We suggest they should not be permitted to move to three.”