Do we hear the fat lady singing on the Revel deal?
1/26/2015 | Real Estate Blog
The tenants of failed casino Revel will just have to bite the bullet, according to a ruling in federal court this week. Revel will go to developer Glenn Straub, as scheduled, after all.
We explained in our Jan. 19 post that owners and operators of a nightclub and the power plant, among others, petitioned the court to hold off on the sale until they could find a way to protect their leases. The terms of the deal allowed — and still allow — Straub to terminate the leases if he chooses.
Straub, of course, is the second buyer for the property and has threatened to walk away from Revel. The first buyer did walk away. The court was not willing to risk an interested and willing buyer for a “third time’s the charm” possibility. If Straub walked, Atlantic City’s efforts to rebuild could suffer a serious setback.
Putting the sale on hold would also harm Revel’s creditors. Remember the creditors? This is a bankruptcy sale. If the sale to Straub were to fall through, Revel’s bankruptcy estate would take an enormous hit. The next step would likely be liquidation — or stripping of “easily liquidated assets” — and that would mean a diminished return for both debtor and creditor.
One tenant, Philadelphia-based Garces Group, has publicly stated that it wants to maintain a presence in Atlantic City, and if that means fighting to hold onto its leases, so be it. The company ran four restaurants in Revel.
Before setting off celebratory fireworks, though, remember that the sale is not official until it closes, and that’s a few weeks away. If Revel has taught us anything, it is that fortunes can fall as quickly as they rise in Atlantic City.
Source: Philadelphia Business Journal, “Revel sale approved; It hurts tenants but helps AC, says judge,” Francis Hilario, Jan. 22, 2015