Yesterday, December 12, a bankruptcy judge canceled the deal for the purchase of Atlantic City-based Revel Casino Hotel. The gambling venue, which is currently closed down, was to be sold to a Canadian investor for the sum of $110 million.
The hotel and casino facility had filed a request for the sale to be terminated. Yesterday, Gloria Burns, judge of the U.S. Bankruptcy Court in Camden, New Jersey, approved Revel’s application. In addition to this, a real-estate company, based in Florida, was assigned to be the new most probable buyer of the struggling casino.
A few days ago, Judge Burns was asked by Revel’s managers to nix the afore-mentioned deal with Brookfield Asset Management Inc. and to declare Florida-based investor Glenn Straub a top bidder. Back in October, Mr. Straub was announced a backup bidder in the auction for the casino venue.
Due to the fact that Mr. Straub did not attend yesterday’s hearing, an additional one will be held on January 5, so as for the purchase to be approved.
In November, Brookfield stated its intention to terminate the deal, due to the huge amounts of money it would need to pay for Revel’s specially built power plant. In addition to this, the Canadian investor missed the deadline for completing the purchase.
According to John Cunningham, Revel’s lawyer, the gambling operator had every right to ask for the termination of the agreement. He also shared that no representatives of Brookfield were attending yesterday’s hearing.
A spokeswoman for the private equity company refused to comment on the matter.
The above-mentioned power plant is currently operated by ACR Energy Partners LLC. It is the hotel and casino venue’s only supplier of electricity and hot water. And Revel is the company’s only client.
It was reported that ACR issued municipal bonds totaling $120 million in 2011, so as to be able to pay the greater part of the cost for the plant’s construction. Due to this, Revel signed an agreement to purchase power and water only from ACR for the next twenty years. The hotel and casino venue also promised to cover the operating costs of the plant and to return no less than 15% of all $40 million that the electricity and water supplier had invested.
According to court filings, Revel paid over $3 million per month to ACR.
Mr. Cunningham shared on Friday that if Mr. Straub is given permission to purchase Revel, he will probably want to terminate the agreement with the electricity and water supplier.
Some time ago, Mr. Straub stated his disappointment with the gambling company’s failure to disclose the information needed about the other bidders.
Back in May, 2013, Revel filed for bankruptcy for the first time. Yet, it was saved, due to the fact that its debt was reduced by $1 billion. It seems, however, that its problems did not stop as it filed for bankruptcy for the second time earlier this year.
