Revel Creditors Lose Bid to Halt Sale to Challenge TermsMichael Bathon
Revel AC Inc. creditors lost a bid to halt the sale of the shuttered Atlantic City, New Jersey, casino resort’s assets to developer Glenn Straub while they challenge the terms of the $95.4 million deal.
U.S. District Judge Jerome B. Simandle in Camden, New Jersey, ruled Wednesday that the creditors failed to show that they would be irreparably harmed or that they had a strong possibility to succeed on appeal.
Revel was one of four casinos that closed last year after New Jersey’s gambling center saw its dominance fade amid growing competition from game rooms in neighboring states. Casino revenue in Atlantic City fell more than 40 percent to about $2.8 billion in 2013 from a peak of more than $5 billion in 2006.
Revel’s creditors, including its energy provider, ACR Energy Partners LLC, and tenants of the resort, argued the sale would strip them of their rights in the property.
Straub’s Polo North Country Club Inc. had said it would be willing to forfeit its $10 million deposit if the judge approved the creditors’ request, rather than be tied to the contracts and leases that Revel struggled to produce profit with in its roughly two years in business.
“Polo North now stands, after a year’s efforts, as the only potential acquirer” for Revel’s assets, the judge wrote in the 50-page opinion. “In that regard, the court notes that, the palpable risk of losing a ready buyer demonstrates, without more, a risk of substantial harm” to Revel outweighing any harm to the creditors.
Allowing the sale to proceed with its current terms would give Straub an advantage in negotiations with ACR and could allow Polo North to evict it, Craig Martin, a lawyer for the energy provider, whose sole customer is Revel, said at a hearing yesterday.
ACR, which invested about $160 million to build the power plant, is Revel’s only source for energy, leading the judge to say he “can’t foresee a situation where Polo would issue that eviction notice.”
Revel, which opened in April 2012 at a cost of $2.4 billion, was the first new Atlantic City casino since 2003. The bankruptcy, its second, and subsequent closing in September eliminated more than 3,000 jobs.
The casino-resort won bankruptcy court approval Jan. 5 to sell its property to Polo, the original bidder, for $95.4 million after an earlier sale at a higher price fell apart.
The bankruptcy is In re Revel AC Inc., 14-bk-22654, U.S. Bankruptcy Court, District of New Jersey (Camden). The Appeals are In re ACR Energy Partners LLC v. Revel AC Inc., 15-cv-302, American Cut AC Marc Forgione LLC v. Revel AC Inc., 15-cv-352, IDEA Boardwalk LLC v. Revel AC Inc., 15-cv-299, IGT v. Revel AC Inc., 15-cv-317, all in U.S. District Court, District of New Jersey (Camden).