Another deal to sell Atlantic City’s ill-fated Revel Casino Hotel out of bankruptcy appears to be falling apart.
After a deadline to sell the property to Florida developer Glenn Straub passed at midnight Tuesday, an attorney for the owners told the Associated Press they would file formal termination notice with a federal bankruptcy judge Tuesday morning. The move would scuttle a proposed $95.4 million deal to buy the casino out of its second bankruptcy since opening a little less than three years ago.
The AP reported Straub wants a bankruptcy court judge to approve an extension of the sale deadline to Feb. 28, while a hearing on that request is scheduled for Wednesday morning.
“If Revel terminates this contract, it will cost them tens of millions of dollars,” Stuart Moskovitz, Straub’s attorney, told the AP. “They will never get a bid at these numbers. From Day One, Revel was a disaster, in every way imaginable.”
Moskovitz told AP reporter Wayne Parry that Revel does not have the legal right to terminate the deal and keep Straub’s $10 million deposit.
Reportedly, a sticking point came when judges ordered Straub and the owners to consider the rights of several former Revel tenants, including nightclub and restaurant owners, who sued to who sued after claiming a sale would ruin their investment. Straub’s lawyer told the AP that kept the deal from closing.
This latest development would be the second time since the fall that a deal to sell the defunct property fell apart. Toronto-based Brookfield Asset Management appeared ready to buy Revel in November for $110 million, but the deal was suddenly scrapped.
That left Straub, the original “stalking horse” bidder after Revel filed for its second bankruptcy, in line to win the property. But Michael Viscount, an attorney for Revel, told the AP Monday that “we need to come up with a Plan C really quickly.”
The 3-year-old casino, which cost $2.4 billion to build, closed last summer after failing to ever turn a profit, despite hopes that it would revitalize Atlantic City with a new upscale offering. It has since become a symbol of failure in a struggling resort town that saw four of its 12 casinos close last year.
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