ATLANTIC CITY, N.J. (AP) — A federal judge on Wednesday allowed the sale of Atlantic City’s former Revel casino to a Florida developer to proceed.
U.S. District Court Judge Jerome Simandle denied a bid by Revel’s tenants to put the sale on hold while they appealed its terms. The tenants, including restaurants, a nightclub and a power plant, say they could be wiped out if the $95.4 million sale goes through as planned.
Developer Glenn Straub had threatened to walk away from the deal if the judge ruled against him.
“The judge arrived at the right decision and now allows us to go forward and begin doing things necessary to start turning Atlantic City around,” his attorney, Stuart Moskovitz, said.
In his ruling, the judge said the tenants won’t be irreparably harmed if he let the deal continue, but Revel and the city would be harmed if he halted it.
“The debtors make palpable claims that ‘a failed sale process … and subsequent liquidation of the debtors’ assets would likely leave the Revel Casino Resort vacant and unused for the foreseeable future’ —clearly frustrating the bankruptcy proceeding, particularly given the absence of any alternate purchaser waiting in the wings,” Simandle wrote. “The debtors further represent that (a failed sale) would result in ‘the permanent loss of approximately 4,000 jobs’ and cause ‘substantial detriment to the City of Atlantic City and the surrounding areas.'”
A bankruptcy court approved the sale to Straub earlier this month. His Polo North Country Club was the first to place a bid on Revel, which cost $2.4 billion to build, and which closed on Sept. 2 after just over two years of operation during which it never turned a profit.
A Canadian firm, Brookfield Asset Management, topped Straub’s bid in an auction last fall, but pulled out of the deal in November in a dispute with bondholders over debt from the construction of Revel’s costly power plant. That left Straub as the sole bidder, a fact the judge noted in his ruling.
Those appealing the decision to award Revel to Straub include ACR Energy Partners, the casino’s sole energy supplier; IDEA Boardwalk, which owns the popular HQ club, and many of Revel’s restaurants. At a hearing Tuesday, an attorney for IDEA Boardwalk said the company could see its entire $16 million investment lost if the sale goes through as planned.
Some if not all the tenants are expected to appeal Wednesday’s decision.
Moskovitz said Straub will now move toward a scheduled Feb. 7 closing date.
He has proposed numerous simultaneous uses for the property including a scaled-down casino, a water park, condominiums and a hotel.
(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)
You may also be interested in: