Revel Casino Deal on Hold

A deal to purchase the Revel Casino for $94.5 million is on hold due to a federal judge's ruling in New Jersey.

Reuters reported that Judge Jerome Simandle ordered that claims from business tenants must be heard before the sale can go through so an emergency hearing is scheduled for 3 p.m. on Monday. Glenn Straub is trying to buy the property without any leases and fees, but the tenants are fighting for control over leased space in the Boardwalk complex.

Straub’s lawyer has threatened to back out of the deal if the sale is delayed. It will be interesting to see how Straub will react if the judge orders him to pay the unpaid bills and to honor the leases of the former tenants. There is a possibility that Straub doesn’t want to wait anymore so he could easily back out of the deal completely if he cannot purchase the property on his own terms.

Construction of the Revel Casino in Atlantic City cost $2.4 billion, but when Revel owners announced the filing of Chapter 11 bankruptcy in 2013, the casino value dropped to $240 million. In 2014, Revel filed for Chapter 11 bankruptcy again, while announcing that the casino would close if a buyer could not be found.

By August 12th no suitable bids had been received, so an official closing was announced on August 18. The Revel closed in September of 2014 and more than 3,000 people lost their jobs.

Glenn Straub is well-known for buying failing properties at a cheap price and turning them around. He stated that his plan is to turn Atlantic City into a family friendly destination where gambling will be only a small part of his grand vision. He also mentioned expanding Atlantic City's airport and the opening of Revel University.

Straub inherited a transportation business from his father and after he built a fortune he started acquiring many properties. Currently, Straub owns more than 600 properties including Tesoro Club and the Palm Beach Polo GolfandCountry Club. He has done miracles with failed properties.

ACR Energy is threatening to cut off electricity, heat, air conditioning and water to the Revel because of unpaid debts but has agreed to wait until the judge considers the issue. Although there is a possibility that Straub might back out of the deal, the Revel property at such a bargain is likely worth the wait.

Photo: Gary Coronado, AP