Federal Judge to Consider Proposed Sale of Revel Casino
Federal bankruptcy judge, Gloria Burns, who has spent the last few months presiding over the bankruptcy hearings of the Revel Casino, will consider the proposed sale of the casino to Florida property developer, Glen Straub, after the initial sale to Brookfield Asset Management fell through.
However, the latest dispute regards how much the Florida property developer should pay as Straub has called for the amount to be reviewed by the courts. Straub challenged the initial sale of the casino after claims of a conflict of interest on behalf of the Revel attorneys who also represented Brookfield Asset Management, the initial bid winners.
During the initial bidding process, Toronto based asset management firm Brookfield, was chosen as the preferred bidders with a bid of $110 million. However, Brookfield backed out of the sale after being confronted with, and disputing, an annual utility bill of $36 million.
After the sale to Brookfield fell through, Glen Straub reiterated his interest in purchasing the bankrupt casino with their bid of $95.4 million. Now though, Straub has said that the price should be less, their initial bid of $90 million.
Straub’s attorney, Stuart Moskovitz, speaking to the press after court hearings said the bid should be less than the $95 million, “because we believe the entire bidding process was tainted.”
During the court hearings, Moskovitz objected, saying that the auction results of last year should be set aside after it emerged that Brookfield Asset Management was represented by the Revel’s lawyers in unrelated proceedings. However, Judge Gloria Burns overruled the objections brought forward by Straub’s attorney and proceeded with the sale stating that the entire process was fair.
After Brookfield pulled out of the deal, Revel approached Straub to buy the casino but the Straub is now also seeking a $3 million breakup fee he says is due to him as the initial bidder in the sale that was not completed. A fee that would effectively lower the selling price from the initial $90 million bid to $ 87 million.
Another dispute raging during the sale comes after Straub said he did not want to inherit any of the Revel’s existing contracts, which includes the one for the power plant and the $36 million utility bill that was the cause of the cause of Brookfield pulling out of the deal.
The utility bill, according to many industry observers, is unusually high and places the casino at a significant disadvantage, as no buyer wants to take on the responsibility of the bill.
At the end of the latest hearings, Moskovitz spoke to the press, stating, “Everything is up for negotiation. We’re not assuming anything.”
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