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February 08, 2015

Judge places hold on sale of Revel Casino

A federal judge in New Jersey has called a temporary halt to the pending sale of Atlantic City's bankrupt Revel Casino and scheduled a hearing on Monday on a motion to block some of the terms of the $94.5 million deal.

On Sunday, U.S. District Court Judge Jerome B. Simandle ordered an emergency hearing for 3 p.m. Monday in the proposed sale of the property to Florida developer Glen Straub, who could potentially lose his $10 million deposit if the deal does not close by Monday's deadline.

Straub is attempting to buy the casino without any obligations to leases held by bars, clubs and restaurants that operated in the casino’s hotel. Some of those tenants have gone to court to block the deal unless it includes provisions protecting their property rights.

An appeals court on Friday ruled in favor of one of the tenants, prompting others to file motions on Saturday to receive similar treatment. Simandle ruled in their favor in setting the hearing for Monday.

Revel closed on Sept. 2 after filing for bankruptcy three months earlier. It cost $2.4 billion to build and opened two years ago.

Conceived as a Las Vegas-style resort that emphasized high-end dining and eye-catching design, the casino failed to catch on in Atlantic City's fading gambling industry, which has seen other casinos shut down as competition emerges from newer properties in nearby states.

Straub's lawyer has threatened to back out of the deal if it does not go forward as specified. If the sale falls through, the casino could face liquidation.