A bankruptcy court judge has approved the sale of Atlantic City’s Revel Casino Hotel over the objections of a losing bidder. On Tuesday, Judge Gloria Burns approved last week’s bid by Brookfield Asset Management, the operator of the Hard Rock in Las Vegas and the Atlantis Paradise Island resort in the Bahamas, to purchase the bankrupt Revel for $110m, about 5% of the property’s $2.4b development costs.
Brookfield’s winning bid came during a contentious auction process that was more or less immediately discredited by Glenn Straub, the Florida real estate developer who put up the $90m ‘stalking horse’ bid that allowed Revel’s owners to proceed with the auction. Straub complained that the timing of Brookfield’s winning bid – which Straub contends was submitted at 3:45am with a 5am ‘take it or leave it’ deadline ultimatum – deprived him of the ability to contact his financial advisers to organize a counter-offer.
On Tuesday, Straub testified that he takes medication for an unspecified condition and that the drawn-out auction process had left him “wandering up and down the streets” of New York looking for an all-night pharmacy that could refill his prescription. Straub apparently doesn’t travel with sufficient quantities of this medication, despite describing his nocturnal street strolling as a “life and death” situation. “I don’t know if I knew my name at 5:30 in the morning.”
Revel’s owners defended the auction process, calling Straub “a disgruntled losing bidder” who “had to put his money where his mouth is. He didn’t do it.” The owners said Brookfield’s $110m bid was “too much money to risk” and thus they made the decision “to take the bird in the hand.”
Burns sided with the owners, saying the auction was “properly conducted and was fair.” Burns said Straub needed to prove there was “some kind of collusion or fraud … and I haven’t heard that today.” Burns set an Oct. 20 date for a hearing to resolve any lingering legal issues involving the sale. Barring any further hiccups, the sale is expected to be finalized within 60 days.
Assuming he manages to keep his medicine cabinet stocked, Straub has vowed to appeal Tuesday’s ruling. Straub, who stands to collect $3m as a consolation fee for making his stalking horse bid, also told the Press of Atlantic City he was continuing to eye the potential acquisition of property spanning seven blocks of Atlantic City, as well as the Renault Winery Resort and Golf property in South Jersey.
