Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Revel Casino Bankruptcy Turmoil Finally Over
Author: Joel R. Glucksman
Date: April 15, 2015
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The sale of Revel hotel and casino closed April 7, ending months of uncertainty, when Florida developer Glenn Straub paid $82 million for the property. The deal was completed shortly after noon, Straub’s lawyer told The Associated Press.
Finalizing a deal
The day before, U.S. Bankruptcy Judge Gloria Burns entered the final sale order, after verbally approving the deal the previous week, according to NJ.com. This completion took place after four separate attempts to purchase the property fell through.
The property cost $2.4 billion to build, and opened for business in April 2012. Since that time, the hotel and casino filed for bankruptcy twice, the media outlet reported.
Failure to turn a profit
The facility shut down Sept. 2, and as a result, it operated for slightly more than two years without even turning a profit, The AP reported. The final sale price of $82 million was roughly 4 percent of the original amount required to construct the hotel and casino.
Even though the sale price fell far short of the construction cost, Judge Burns elaborated on her decision to approve the transaction, according to The AP.
“The consideration to be provided by the purchaser pursuant to the agreement is fair and reasonable; is the highest or otherwise best offer for the assets; will provide a greater recovery for the debtors’ creditors than would be provided by any other practically available alternative; and constitutes reasonably equivalent value and fair consideration under the Bankruptcy Code,” she wrote, the media outlet reported.
Tenant issues
One matter the judge’s ruling failed to clarify is what will happen to the tenants currently doing business in Revel once Straub opens the location again, according to the news source. In addition, the agreement between Revel and ACR Energy Partners, which provides utility service to the hotel and casino, is uncertain.
The tenants previously appealed the proposed $82 million deal, alleging that the agreement would deny their property rights. Judge Burns had pointed to such legal action in the past, stating at one point that she lacked the authority to approve a sale because of these appeals.
Now that the sale of Revel has been finalized, Straub will aim to reopen the facility this summer, according to The AP. However, he has not yet determined what he will call the property, his lawyer told the news source.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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