Like the old man Monty Python and the Holy Grail, the latest deal to sell the Revel casino is “not dead yet,” but it might as well be. According to a report by ABC Philadelphia on Wednesday, U.S. Bankruptcy Court Judge Gloria Burns refused to extend a deadline to sell the casino to Glenn Straub. However, she failed to rule on whether Revel could terminate their agreement with the Florida real estate mogul.
Instead, Burns said that she would issue a ruling on Tuesday whether Revel can cancel their sale of $95.4 million to Straub. If she cancels the deal, it would be the second deal to fall through for the bankrupt casino. The original potential buyer, Brookfield Holdings, failed to close on the deal after issues arose regarding debt held by the property’s power provider.
Another Sale Could Force Price Even Lower
John Cunningham, attorney for Revel, made it clear that they are ready to find a new buyer for the property. “We’re ready to find a new buyer,” Cunningham told reporters. “We have zero confidence in Polo North’s ability to close.”
Should the sale to Straub be terminated, Revel would then be forced to try to find another buyer. New bids may be taken for the property and the sale price for the casino will likely fall below $90 million. If another round of bids were to occur, Straub would be free to take another shot at getting the property for less.
According to Stuart Moskovitz, attorney for Straub, “If we can buy this for $40 million instead of $95.4 million, why not?” Moskovitz had also stated that they were still willing to close on the property at $95.4 million provided that matters surrounding tenant rights are resolved.
Tenants of the former property have successfully convinced the court to prevent a summary sale that would terminate their lease rights. Straub had sought to get the property free and clear, giving him the power to remove tenants at will. Over $16 million is tied up in tenant investments at Revel.
Matter Could Drag On For Months
Unless Judge Burns throws a major curveball on Tuesday, the sale of the Revel could continue for several more months. Upon termination, Revel would be forced to try to find interested buyers, something they have already had problems acquiring.
Hard Rock International could be a potential player as their CEO recently was given preliminary approval to operate a casino in Atlantic City. However, the company was reportedly not interested in owning a casino outright.
If a new sale is held, Hard Rock may not be able to pass up the bargain that could present itself. Straub had hinted that the property could go for as little as $30 million. If the price drops in that range, it may be too ripe a prospect to pass up for the Hard Rock.
Regardless of the future owners, there are other matters to resolve including the former financing of the Revel power plant and outstanding tax liens. A deep discount such as that hinted by Straub may be the only way a prospective buyer agrees to take on those headaches.