Revel Auction Loser Straub Challenges Sale to BrookfieldChristopher Palmeri and Michael Bathon
Revel AC Inc. should reopen bidding for its Atlantic City casino, which Brookfield Property Partners LP won at auction last week, according to a Florida investor who claimed he was cheated of a chance to make a higher offer.
Revel, which cost $2.4 billion to build, closed last month after two years of unsuccessfully trying to make a profit in the struggling New Jersey gambling center. It accepted a $110 million offer from Toronto-based Brookfield on Oct. 1 after an all-night auction. The sale is scheduled to go up for approval today in U.S. Bankruptcy Court in Camden, New Jersey.
Glenn Straub, owner of the Palm Beach Polo Golf and Country Club in Wellington, Florida, protested the way the auction was handled, saying in a court filing Oct. 5 that Revel broke an agreement to provide details about competing bids. Straub also said a “life or death” medical issue hindered his ability to counter Brookfield’s winning offer.
“This entire auction proceeding is highly suspect, and, given the appearance of impropriety and lack of open communication, tainted at best,” Straub’s lawyer, Stuart Moskovitz, said in the filing. Straub is asking the court to block the sale and to appoint a trustee to restart and oversee the auction.
Andrew Willis, a spokesman for Brookfield, declined to comment on Straub’s complaints.
Brookfield, owner of the Atlantis resort in the Bahamas and the Hard Rock Hotel & Casino in Las Vegas, said it plans to reopen Revel as a casino. Brookfield this year acquired a team of hotel industry experts who can assist in Revel’s turnaround.
The company has upgraded the rooms and restaurants at Atlantis and integrated the property into Marriott International Inc.’s booking system, giving an indication of what it could do with Revel, Willis said.
Straub entered the auction as the “stalking horse” bidder with a $90 million opening offer. In a Sept. 29 court filing asking to halt the sale process, Straub said he was led to believe he would see the offers from other interested parties after the Sept. 23 deadline for submitting bids.
He still wasn’t aware of Brookfield’s offer when bidding began Sept. 30, Moskovitz said in a phone interview. Straub could have offered more, but needed time to evaluate his options, according to the lawyer.
“We told them we were prepared to bid higher,” Moskovitz said. “We could not do it that day.”
According to Straub’s Oct. 5 filing, he didn’t have pills with him that he needed for a medical condition, which isn’t specified in the document.
“We gave Mr. Straub every opportunity to make another bid. We stayed up all night and we didn’t receive any,” John K. Cunningham, a Revel attorney, said in an interview last week after the auction. “All he is, is a disgruntled losing bidder.”
The bankruptcy is In re Revel AC Inc., 14-bk-22654, U.S. Bankruptcy Court, District of New Jersey (Camden).