A federal judge has set up a court showdown over the future of Atlantic City's former Revel casino hotel.
In a rare Sunday ruling, Judge Jerome Simandle ordered that claims from business tenants at the casino, as well as its sole supplier of utility services, must be heard before the sale can go through. The $95.4 million sale to Florida developer Glenn Straub is due to close on Monday, but the latest court order has cast that into doubt.
Continue Reading Below
The judge scheduled a hearing for 3 p.m. Monday on emergency motions from businesses, including ACR Energy Partners and the popular HQ nightclub that had to shut down when Revel closed its doors Sept. 2.
The outcome could well determine whether Revel is sold or whether Straub walks away from the deal, as he has threatened to do, if he is saddled with leases for businesses he does not want.
"Everything's up in the air right now," Straub's attorney Stuart Moskovitz said Sunday. "There's these court rulings hanging over everyone's heads."
He would not predict what Straub might do if Monday's ruling goes against him, requiring him to honor the leases of the former tenants, and to pay unpaid bills and fees stemming from the power plant.
Monday's hearing has the potential to resolve the most contentious issues standing in the way of Revel's sale; it could clear the way for the sale to close relatively soon.
But it also could scuttle the deal if Straub decides he no longer wants to wait. He has in the past threatened to scrap his purchase if the sale is delayed beyond Monday's scheduled closing date.
"There are multiple motions pending in multiple courts, some of which will not be heard on Monday," Moskovitz said. "No predictions until we see how these motions are determined."
The so-called "amenity tenants" argue they were operating successfully, and should have the right to have their leases honored by a new buyer of Revel. IDEA Boardwalk, a company consisting of tenants including HQ and several celebrity restaurants at the former casino, says its $16 million investment will be wiped out if Straub is allowed the buy the casino free and clear of its leases.
And ACR Energy is threatening to cut off electricity, heat, air conditioning and water to the building if its debts are not paid. They intended to pull the plug last Thursday, but agreed to keep the power flowing at least until Wednesday when a bankruptcy court judge will consider the issue.
Revel and ACR say they are working toward a resolution that could eliminate the need for Wednesday's hearing.
Straub is the lone remaining bidder from a bankruptcy court auction of Revel last fall. He was the runner-up, but became the chosen bidder after the winner, Canadian firm Brookfield Asset Management, scrapped its $110 million deal to buy the casino, citing a dispute over the power plant debt.
In obtaining preliminary approval last week to own a casino in New Jersey, the Hard Rock chain said it has been interested in Revel and has had talks with Straub about some level of involvement in it. But CEO James Allen would not go into detail on what was discussed with Straub.
Wayne Parry can be reached at http://twitter.com/WayneParryAC