February 07, 2015
The sale of Atlantic City's shuttered Revel Casino to a Florida developer has been thrown into jeopardy following a U.S. federal appeals court decision that would change the terms of the transaction.
The sale to Florida developer Glen Straub, who purchased Revel in bankruptcy court for $95.4 million, was expected to be completed on Saturday.
The sale has a Monday deadline and if it does not proceed, Straub could lose his $10 million deposit and Revel would likely go into liquidation.
Straub sought to buy the casino without any obligation to existing leases held by the bars, clubs and restaurants that operated inside the hotel.
The decision by the Third U.S. Circuit Court of Appeals Court on Friday reversed a lower court decision against one of those tenants, IDEA Boardwalk LLC, which wanted to block the sale while it could appeal to protect its property rights.
Stuart J. Moskovitz, an attorney representing Straub, was quoted on Friday by the Wall Street Journal as saying that the buyer might walk away from the sale if an appeal interfered with the deal. Straub might consider walking even if it meant losing his $10 million deposit, Moskovitz said.
The Philadelphia Inquirer said Friday's ruling applied exclusively to IDEA Boardwalk and not to the other former tenants. It said the company, a subsidiary of Ironstate Development Co., declined to comment.
Revel closed on Sept. 2 after filing for bankruptcy three months earlier. The casino cost $2.4 billion to build and opened two years ago. It had been conceived as a Las Vegas-style resort that emphasized high-end dining and eye-catching design.
Along with several restaurants that had also leased space inside the casino, IDEA Boardwalk lost a federal court challenge to the sale in January. The nightclub owner then appealed.
Friday's ruling means IDEA Boardwalk cannot be stripped of its property rights until there is a final ruling on its appeal.
"This Court takes no position on the merits of the appeal pending in the District Court," Friday's court order said.