Revel Casino Goes to Auction on September 24

Industries Reuters

The bankrupt Revel casino hotel in Atlantic City will go to auction on Sept. 24, a judge ruled on Monday, after the only bidder clashed with creditors who wanted to slow the rushed sale.

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Judge Gloria Burns in Camden, New Jersey also set Sept. 23 as the deadline for competing bids to top the $90 million offered by Florida developer Glenn Straub and his Polo North Country Club Inc. Revel cost $2.4 billion to construct.

Revel also got approval to pay Straub a $3 million break-up fee if his is not the winning bid at the auction.

The auction was set for two weeks after Straub's proposal was made public, and creditors complained potential buyers could use more time to put together competing bids

The hearing was marked by threats of litigation if the auction was postponed, complaints that Straub was being secretive about his plans for the massive complex and the appearance of a potential competing bidder.

Still, given that the casino had postponed two previously scheduled auctions for a lack of bids and finally closed on Sept. 2, Burns said she welcomed the burst of interest in the two-year-old complex.

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"This is the first time in this case there seems to be a buzz going on," she said of the apparent bidding interest.

Burns was told that another unidentified party contacted the U.S. Bankruptcy Court early on Monday to state their intent to bid.

The casino was hailed as the future of Atlantic City when it opened, but after two bankruptcies the owner, Revel AC Inc, has struggled to find potential buyers that met various criteria.

Revel's closure was a body blow for New Jersey's struggling seaside city. Trump Entertainment Resorts, which owns a casino in the same section of Atlantic City's boardwalk as Revel, blamed Revel's closure for a sharp drop in gaming revenues.

Trump filed for bankruptcy last week, and said it may wind down operations at its two Atlantic City casinos if it can't strike cost-cutting deals with labor and lenders in the coming weeks.

Revel's Monday court hearing was adjourned for two hours as the parties tried, and failed, to work out a way to postpone the auction to move it past upcoming Jewish holidays. Bankruptcy auctions often run for days, and Burns said she was concerned Rosh Hashanah, which begins at sundown on Sept. 24, would disrupt the process.

A lawyer for the official committee of unsecured creditors called the negotiations during the adjournment "a very unpleasant time" and said he was concerned that strife would linger.

"I hope it's not indicative of what might happen when we get into the auction," said Warren Usatine, the creditors' attorney who is with Cole, Schotz, Meisel, Forman & Leonard.

Revel filed for bankruptcy in June, its second since it opened in 2012. 

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Tom Brown)