The planned sale of the shuttered Revel Casino in Atlantic City, New Jersey, to a Florida developer has been thrown into jeopardy following a decision by a U.S. federal appeals court that would change the terms of the transaction, according to court documents.
The sale to Florida developer Glen Straub, who bought Revel in bankruptcy court for $95.4 million, had been expected to be completed on Saturday.
The sale has a Monday deadline. If it does not proceed, Straub could lose his $10 million deposit and the casino would likely go into liquidation.
Straub wanted 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 had sought to block the sale while it could appeal to protect its property rights.
The Wall Street Journal quoted Stuart J. Moskovitz, an attorney representing Straub, as saying on Friday that the buyer might walk away from the sale if an appeal interfered with the deal, even if it means losing his $10 million deposit.
The Philadelphia Inquirer said Friday's ruling applied to IDEA Boardwalk only and not to the other former tenants. It said the company, a subsidiary of Ironstate Development Co., of Hoboken, New Jersey, declined to comment.
Revel, which cost $2.4 billion to build and opened two years ago, closed on Sept. 2 after filing for bankruptcy three months earlier. Revel had been conceived as a Las Vegas-style resort that emphasized high-end dining and eye-catching design.
IDEA Boardwalk, along with several restaurants that had also leased space inside the casino, in January lost a federal court challenge to the sale. 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.
