Developer Glenn Straub may have much to be thankful for this holiday season: His company is next in line to purchase Atlantic City’s Revel casino. Revel AC Inc. sought bankruptcy protection in June. The casino closed on Sept. 2, and less than a month later, a bankruptcy auction ended with Brookfield US Holdings LLC winning the property. Straub objected to the sale, complaining that Revel’s representatives were not open and honest in their negotiations with prospective buyers.
His initial arguments failed, as did his appeal. The bankruptcy court concluded that there was no evidence of collusion or bad faith and that the parties negotiated “and from arms’ length bargaining positions.” The last means that the parties were acting in their own self-interest, that neither party has pressured the other to accept less than optimal terms. In this case, the court had another factor to consider as well: Brookfield had the highest bid.
Brookfield initially thought the sale would be complete within 60 days. The company owns two other casinos and planned to renovate Revel and reopen as a casino. But there was a snag.
The Revel development isn’t just a casino. It is a casino and a power plant that provides hot and cold water and electricity for the casino — just the casino. As Revel was failing, it was falling behind on its monthly payments to the company running the plant, ACR Energy Partners LLC (South Jersey Industries provides the natural gas).
ACR had also objected to the sale to Brookfield. But ACR had different reasons — and those reasons are partially responsible for Brookfield pulling out of the deal this week.
We’ll explain more in our next post.
Sources:
NBC Philadelphia, “Revel Casino Purchase Terminated,” Vince Lattanzio, Nov. 20, 2014
NJ.com, “Revel casino sale approved by judge, rejecting bid to overturn bankruptcy auction,” Ted Sherman, Oct. 7, 2014
Our firm handles commercial real estate disputes like the one discussed above. If you have questions about your own situation, please contact us.
