ATLANTIC CITY, N.J. (AP) — The owners of Atlantic City's Revel casino on Tuesday killed the latest deal to sell the failed gambling resort.
Revel AC notified Florida developer Glenn Straub that it had canceled a deal to sell him the casino for $95.4 million because Monday's deadline to complete the sale had expired. The casino also said it's keeping Straub's $10 million deposit.
In a court filing, Revel asked a bankruptcy court judge to approve its action. Consideration of that request is likely to come at a hearing already scheduled for Wednesday at which Straub's lawyer wants the judge to approve an extension of the sale deadline to Feb. 28.
"We will resolve this in court (Wednesday) morning," Straub's lawyer, Start Moskovitz, said. He would not say whether he is optimistic the judge will side with Straub.
Straub thus became the second buyer to fail to complete a purchase of Revel in the past three months. A Canadian firm, Brookfield Asset Management, canceled a $110 million deal for Revel in November, citing a still unresolved dispute over debt from the construction of the casino's power plant. That dispute helped sink Straub's purchase, as well.
Revel cost $2.4 billion to build, never turned a profit, and closed after two years.
The deal fell apart Monday after U.S. District Court Judge Jerome Simandle refused to let the proposed sale go through without taking into account the legal rights of a nightclub and restaurants at the former casino, as well as its utility provider, all of which are appealing a previous court ruling that the sale can go forward "free and clear" of their leases.
The judge issued a temporary stay on Monday, allowing the sale to proceed but saying it could not do so without taking the appellants' rights into consideration in the purchase. That left Straub unable to close on a deal, according to his lawyer.
"We can't close if we have no idea what we're closing on," Moskovitz said.
The deal had been progressing toward Monday's closing date, until a federal appeals court sided with the tenants late Friday and issued a partial stay of the sale. Monday's continuation of that stay appeared to be the last straw. The judge explicitly said that nothing in his order prevented the sale from closing, but the buyer disagreed.
Last week, the CEO of the Hard Rock franchise obtained preliminary authority to own a casino in Atlantic City, and indicated the company had spoken with Straub about a possible involvement in re-opening Revel. But Revel attorney Michael Viscount said Hard Rock was never interested in buying it.
Straub had proposed re-opening Revel under a different name as a smaller casino, a water park, hotel and condominiums.
Viscount said that by keeping Straub's $10 million deposit, "There's a lot of things we can do to keep the ship afloat for a while."
Revel also kept an $11 million deposit from Brookfield when that deal fell apart.
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