The ongoing saga of the Revel casino continued this week with Glenn Straub revealing that he wants a discount on the property. In other news, the Revel tax lien that failed to sell at auction has been purchased by its primary debt holder, but at a discount.
The Press of Atlantic City revealed on Wednesday that Glenn Straub is looking to buy the Revel Casino for $87 million instead of the $95.4 offered back in September. Straub was the casino’s stalking horse bidder earlier this year when he offered $90 million for the casino.
He later became the backup bidder at $95.4 before Brookfield Holdings was awarded the property for $110 million. They later threatened to withdraw from the deal, citing unwillingness by the casino’s power company to negotiate over construction debt. Revel lawyers tried to salvage the deal, but Brookfield made extra monetary demands that the casino could not meet.
Straub Wants Credit for Being Stalking Horse
When Glenn Straub revealed continuing interest in the Revel following Brookfield’s withdrawal, few believed he would sit back and pay the $95.4 million. Straub has been the proverbial thorn in Revel’s side since he agreed to become the stalking horse bidder for the property.
First, he forced the casino to include a breakup fee of $3 million in the contract if he lost the bid for less than $1 million, and threatened to pull out and pursue legal action when the bankruptcy court balked at the idea. Later, he issued repeated challenges to the auction claiming that it was performed unfairly. He lost those challenges.
Now that Straub is the only bidder left, he believes that the $95.4 million bid should be eliminated and then the $3 million breakup fee applied to the price because he served as the stalking horse bid. In a bankruptcy court filing on Wednesday, he claimed that had he known that the auction was going to be unfair, a $95.4 bid would have never been issued.
The Revel may have a little room to play regarding Straub’s offer. According to the report, Revel will keep an $11 million deposit paid by Brookfield when they were awarded the $110 million bid. Even if they agree to give what equals to be an $8.4 million discount from the auction price, Revel would technically still be ahead of the game.
Revel Tax Lien Sold to Wells Fargo
On Tuesday, the Press of Atlantic City reported that the Revel tax lien that failed to sell at auction has been sold to Wells Fargo. The company negotiated with Atlantic City and ultimately agreed to pay $26 million for the note. Revel originally owed $32.5 million in taxes. Wells Fargo is the primary lender to Revel.
With the purchase of the tax lien, the future owner of Revel will have to pay the $26 million bill plus interest to Wells Fargo within two years or the company can foreclose on the property. An anonymous buyer purchased the tax lien of $22 million from Trump Entertainment that covered both Trump Plaza and the Trump Taj Mahal. It is also reported that the $22 million for that lien has already been paid to the city.
With the closure of four casinos in 2014 and a fifth in bankruptcy, these liens provide a much needed infusion of cash prior to the start of the new year. The tax liens sold by the city will give it a combined $48 million in cash that it will use for day-to-day operations of the city, which includes paying their employees.