The Revel Casino in Atlantic City is only a few years old, and has been nothing but a money pit for investors. One man from Florida, casino and business developer Glenn Straub, thinks he can turn it around. Last week, a US District Court judge agreed.
Having filed for Chapter 11 on multiple occasions since opening 2012, Revel Entertainment Group LLC filed its final bankruptcy in June of last year. The company said that if no suitable buyer was found for the property, they would be forced to shut down by September. The owners received no offers they were willing to accept, thus Revel was officially closed on Sept 2, 2014.
The New Jersey Bankruptcy Court held an auction for the property in October, with Brookfield US Holding LLC, based out of Toronto Canada, being the top bidder at $110 million; a miniscule fraction of the $2.4 billion invested to build the Atlantic City casino in 2010-11. As bankruptcy policy dictates, a second-place ‘backup bidder’ was named just in case the winner wasn’t approved by the courts. One month later, before the review was completed, Brookfield reneged on the deal. That left the runner up, Glenn Straub, with the highest remaining bid of $94.5 million.
Amenity Tenants Incensed, demand appeal
Based out of Florida, casino buyer Straub did not meet the approval of the Revel’s night club owners, restaurateurs and other amenity tenants due to his filed request to be free and clear from any existing lease obligations with those tenants. Judge Gloria Burns approved the sale, and Straub’s request, resulting in an immediate call for temporary postponement of the sale from the amenity tenants, who wished to appeal the decision.
The Florida casino buyer responded by threatening to back out of the deal if the appeal was granted, despite the fact that he would forfeit a $10 million deposit.
Final Decision from US District Judge Simandle
Last week, all parties stood before Judge Jerome B. Simandle of the U.S. District Court in Camden, NJ to hear the verdict. Judge Simandle sided with the Florida casino developer, upholding the previous ruling to allow Glenn Straub to purchase the property for $94.5 million, with no obligation to honor existing tenant leases.
“Such concerns would not sufficiently outweigh the far more prevalent interest in facilitating the success of bankruptcy proceedings and enabling such proceedings to reach finality,” read the judge’s statement in court documents.
The Future of Revel Casino
According to an email from Attorney Stuart J. Moskovitz, who has represented the developer throughout the proceedings, Mr. Straub can now proceed with his plans for the New Jersey casino property. “This now gives my client the opportunity to put in motion what he set out to do: Begin the turnaround of Atlantic City, which, as we all know, is currently on a severe downward spiral.”
Those plans could include a downsized casino, water park and ferry, according to what the Florida casino buyer told reporters during a break in the initial court hearings three weeks ago. Straub painted an affluent picture for the press, detailing the development of a water park and high-speed ferry to New York City. He assured everyone that at least a small casino would remain, but offered no time frame for the re-opening of the Revel.