During Wednesday’s hearing in Camden, Judge Gloria Burns will consider whether ACR Energy Partners, Revel’s sole power supplier, can shut the plant over unpaid bills.
The power company agreed to keep the casino's heating and fire prevention system powered while the prospective buyer, developer Glenn Straub, tries to work out a deal with the building's restaurant and nightclub tenants.
It could all be for naught though as Straub and Revel's management were unable to close the sale by midnight Monday over the same tenant issue.
Attorneys for the bankrupt resort asked for permission to scrap the sale and keep the would-be buyer’s $10 million deposit.
Attorneys for Revel say Straub’s Polo North Country Club failed to finalize a $95.4 million sale of the property by Monday's contractual deadline. But Stuart Moskovitz, an attorney for Polo North, wants that deadline extended to Feb. 28 so court battles by Revel’s tenants can be addressed.
Revel attorney John Cunningham on Tuesday declined to comment on whether there's another buyer for the defunct resort, which cost $2.4 billion to build but never turned a profit. He said liquidation of the property is “not on the table right now."
At the heart of the fracas is a January order by Chief U.S. Bankruptcy Judge Gloria Burns, who said Straub could have virtually complete control over the Boardwalk complex, including dominion over space leased by Revel’s sole power supplier, HQ nightclub and gourmet restaurants.
The tenants, who say the ruling allows Straub to boot them from the premises and wipe out huge investments they’ve made there, have appealed the ruling to Chief U.S. District Judge Jerome Simandle.
“The basic issue is: Can the owner of a building sell the building out from under the tenants?” said Jonathan Lipson, a professor at Temple University's Beasley School of Law who studies bankruptcy. “It turns out that the answer to that is pretty complicated.”
Lipson says there’s still a chance that the Polo North deal could be salvaged —“Hail Marys happen” — and that gamesmanship often flavors the Chapter 11 sales process.
“It’s always possible that they could strike a deal in a grand bargain,” he said.
But he said it’s also possible that the doomsday scenario — liquidation — becomes reality, and Revel is stripped for parts and sold as a shell. Judge Burns also might let Revel’s main creditor, Wells Fargo, take the property, though it’s not clear that the bank, which is funding Revel’s bankruptcy case, is interested in taking over the campus.
Revel might find another buyer intent on running the property as a going concern. But Revel has been trying to sell itself since at least November 2013, and Polo North is among only two companies whose offers have been publicly accepted by Revel AC, the closed resort’s bankrupt parent.
A $110 million sale to the other company, Brookfield US Holdings, was aborted in December after that company said it could not satisfactorily rework fees connected to the plant that powers Revel.
Contact Reuben Kramer: