Revel Casino: 2nd Bidder to Step Up After Brookfield Bails on Sale
After Brookfield, the Toronto based asset management firm, pulled out of the Revel Sale, second place bidder, Glen Straub, has stepped in to buy the shuttered casino, despite still appealing the initial sale in US Bankruptcy Court.
Last month, Brookfield Property pulled out of the deal to purchase in a surprise announcement, stating that it would be walking away from buying the billion-dollar hotel and casino amidst a disagreement over a utility contract.
A Brookfield spokesperson, speaking about the withdrawal, said in a statement that the reversal of their decision to buy the casino “stems from a disagreement with bondholders controlling debt related to Revel’s power plant”.
On Wednesday night, Revel filed papers with the US Bankruptcy Court, seeking permission to terminate its deal with Brookfield and to schedule a hearing with presiding Judge Gloria Burns to approve the sale of the casino to second place bidder, Glen Straub and his Polo North Country Club Inc.
Straub filed an appeal in October in protest of the way he perceived the sale, stating that it was “tainted”. Speaking after court proceedings, he said “We don’t want to give up our rights to appeal”. Should he successfully appeal the sale, he would be able to purchase the casino for his original bid of $95.4 million instead of having to match or beat the bid placed by Brookfield.
There are some that believe Revel’s decision to terminate the deal with Brookfield could be a clever negotiating tactic as most motions are, according to Jonathan Hugg, a lawyer in the Philadelphia office of Clark Hill P.L.C. stating: “What it does is, it focuses people’s minds.”
It would seem that Straub, who has radical plans for the casino, is not everybody’s choice of owner. Speaking to Philadelphia’s KYW Newsradio, Roger Gros, an analyst for Global Gaming Business said in an interview that the sale would not be a good fit.
“I’m a little fearful about what’s going to happen here, frankly, just because he hasn’t given a vision for what he wants to do with the property, and some of the things we have heard have been kind of wild, off-the-wall ideas,” Gros said during the interview.
Among Straub’s many plans for the casino include the likes of a Global think tank which would “address global problems” as well as plans for a high speed ferry to transport people from Manhattan and even “Super Jumbo Jets” that would fly in Arabian Businessmen. The idea’s it seems, are far away from the normal, gambling-centralized business Atlantic City is used to and, although Straub’s plans may seem wild, he would not be the first person to transform an old casino after Richard Stockton College bought the shuttered Showboat casino with plans to transform it into a college campus.
But Straub says that there are no definite plans for the billion-dollar property and that he is still keeping his options open.
“We never have to explain ahead of time [the plans for the property] unless it is a bid condition,” he said speaking to KYW, “it definitely wasn’t a bid condition.”
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