Atlantic City’s Easter miracle: Revel deal closes
4/6/2015 | Real Estate Blog
Bankruptcy Judge Gloria Burns approved the sale of Revel casino to Florida developer Glenn Straub on Thursday, April 2. By the end of the next day, Glenn Straub and his Polo North Country Club were the undisputed owners of the failed casino. And what a deal he got: Built for $2.4 billion, the purchase price of $82 million works out to about 4 cents on the dollar.
Straub may be the undisputed owner of the property, but the property is still mired in dispute. Just two days before the judge’s decision, another deal was proposed by a group of Revel tenants. Court documents indicate that two parties new to the Revel drama were putting together financing for a bid that would top Straub’s by $6 million. This deal, unlike Straub’s, came with promises to continue the tenants’ leases. (See our Jan. 26, 2015, post for a little background on the tenants’ concerns.)
In the filing, the tenants asked that the court postpone the sale to Straub while the newcomers put the final touches on their financing. The court said no on Thursday, but Revel’s lender, Wells Fargo Bank, may well have said no a little more loudly before the court’s ruling. Wells Fargo has been anxious to wrap up the bankruptcy, and another delay was not acceptable.
Judge Burns was apparently anxious to avoid more delay as well. Straub’s purchase plan does not address the tenants’ concerns one way or the other — he dropped his demand that the property come free and clear of encumbrances, but he did not promise, as the newcomers would have, to honor existing leases. The Wall Street Journal reported that his plans did not change: He will cancel the leases, including the lease with power plant operator ACR Energy. The power plant has been a persistent source of frustration for potential buyers, thanks to ACR’s unwillingness to negotiate a new, less expensive, contract. Straub told reporters he would bring in generators and boilers to keep the lights and the environmental controls on at the complex.
The bankruptcy should wrap up in the next three months, though the formal date is April 30. Revel is asking for more time to finalize its exit plan. From these most recent developments, it looks as if the court is ready to see the back of Revel sooner rather than later.
Wall Street Journal, “Judge to Approve $82 Million Sale of Revel Casino to Florida Developer,” Tom Corrigan, April 2, 2015
Philly.com, “Revel sold, finally, for $82M,” April 3, 2015