NJ Judge Approves Revel Casino Sale
New Jersey Judge Gloria Burns affirmed the sale of the Revel Casino in Atlantic City to the Toronto based private equity firm, Brookfield Capital, for $110 million, despite the efforts of Glen Straub, the Miami based property developer who hoped to block the sale.
Court Was Obligated to Take the Brookfiled Bid Over the Straub Bid
During the hearing, Bankruptcy Court Judge Gloria Burns, thanked Glen Straub and his company for making the initial $90 million cash offer, known as the Stalking Horse, but ruled that the court was obligated to take the guaranteed Brookfield bid over that made by Straub.
Judge Burns, speaking on the culmination of the bankruptcy hearing, said in a statement “The sale was properly conducted and was fair”. The comments were made after losing bidder argued that he was not permitted enough time to organize a counter after their initial bid was beaten by eventual winners Brookfield.
Glen Straub, owner of the Polo North Country Club Inc, said he was prepared to top the Brookfield bid of $110 million but could not immediately contact his financial advisors as was in the midst of battling a serious illness.
“I’m worrying about my life” said Straub. His investment company wanted more time to top the Brookfield bid and has even gone so far as to accuse Brookfield of withholding information about competing bids. Something the Revel lawyers in charge of the bankruptcy hearing have denied in court.
But, the Revel lawyers, according to a statement from Moelis & Co. Managing Director Barak Klein, the casino and its advisors made the decision to accept the Brookfield bid in fear that stalling and waiting for a better offer from Straub could cause the private equity firm to withdraw their bid and dragging out the process even longer.
When the 06:00 deadline passed without a rival bid submitted by Glen Straub, Brookfield was declared the winner and the finalization process for the sale of the casino began. “It was in the best interest for sure” said Klein of Moelis & Co. who advised Revel during the sale, “we raised the [original] price by 20 million bucks”.
Brookfield also owns the Hard Rock Hotel and Casino in Las Vegas so are well placed to reopen the Revel, which they have plans to do, although it is not known when.
Straub, on the other hand, had planned an extravagantly different use for the building and had plans to transform it into a think tank to solve the world’s problems. An idea that was not met with the greatest of interest among New Jersey locals who have relied heavily on the casino industry for employment.
3000 people lost their jobs when the Revel closed and it is thought that they will get first preference when the new casino opens. Although, with more than 9000 people out of work following the closure of 5 Atlantic City casino, competition for new jobs could be stiff.
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