A bankruptcy judge on Dec. 12 voided the proposed sale of the Revel Casino Hotel to a Canadian firm that backed out of the deal. As requested by Revel Entertainment, Bankruptcy Judge Gloria Burnsof the casino to Toronto-based Brookfield Asset Management for $110 million, according to The Associated Press. The company won the right to purchase the failed casino resort in a court auction just a few years after its $2.4 billion construction.
After failing to resolve a dispute with bondholders regarding debt from the construction of the casino's power plant, however, the Canadian firm backed out of the deal, according to the news source. As a result, Revel asked that the sale could be officially canceled in order to pursue acquisition by another bidder.
"They had an outside date to close on Nov. 28," Revel attorney John Cunningham said of Brookfield, the AP reported. "They preemptively went to the press and announced that they were walking away from this transaction. Quite simply, they have affirmatively repudiated the contract."
In 2012, Revel lost construction financing and was forced to look for a new contractor to build its power plant, Reuters explained. It contracted with ACR Energy Partners, and agreed to back ACR's financing of the project in order to complete the deal. This turned out to be a costly decision, and even in bankruptcy, Revel is paying ACR about $60,000 per day before paying for the electricity required for heating and cooling. Turning off heating or cooling could allow mold to grow, which would further damage the worth of the building.
A hearing will be held on Jan. 5 to determine whether Burns will allow runner-up Glen Straub and his firm Polo North Country Club Inc. to buy the casino. Straub eventually bid $95 million during the auction, but lost out to Brookfield.
Straub has proposed a number of potential uses for the former casino resort, including a "genius academy," according to the AP. This would be a meeting place for the world's top minds to meet and look for solutions to society's problems.
As a creditor right's and bankruptcy attorney with his practice in New Jersey, this isn't the first time I've blogged about the latest bankruptcy proceedings of this Atlantic City casino. Along with the bankruptcy of Trump's Taj Mahal, check out some of my previous posts regarding Revel Entertainment Group.
- Atlantic City’s Revel To File For Bankruptcy Again
- New Jersey’s Revel Casino Exits Bankruptcy Protection
- Judge Delays Taj Mahal Bankruptcy Filing
- Trump Entertainment Seeks To Stop Pension Payments
- Taj Mahal Casino of Atlantic City May File For Bankruptcy