Revel lawyer: Casino's closure could spur sale

As painful as the Sept. 2 closure of the Revel casino in Atlantic City will be for the more than 4,000 employees who work there, it could help spur a sale of the $2.4 billion property, a Revel attorney said in bankruptcy court Monday.

None of the bidders who submitted bids by the Aug. 4 deadline were willing to operate Revel as it exists and bankroll losses of between $1 million and $2 million a week.

"It may be that some of the dust has to settle from our shutdown," John K. Cunningham, a White & Case L.L.P. attorney who represents Revel, told Gloria M. Burns, chief judge in U.S. Bankruptcy Court in Camden.

Cunningham said Revel lawyers and investment bankers were still trying to work through conditions placed on the bids they received. One attempted to shift all risk of loss to Revel's current owners, he said.

At the hearing, Cunningham came under pressure to provide more information about the sales process and the decision to close Revel from Warren J. Martin Jr., who represents numerous Revel tenants, including Jose Garces restaurants.

Martin, of Porzio, Bromberg & Newman P.C. in Morristown, N.J., whose clients employ 800 people, complained to Burns about the lack of transparency and demanded that a new auction date be set.

"Who decided that a closure is better than a sale?" Martin asked. "It would seem to me that a bad sale is better than a closure."

Martin, who is not subject to a confidentiality agreement because his clients are not part of the controlling group in the bankruptcy, also pointed out that Carl Icahn's Icahn Enterprises L.P., long rumored to be interested in buying Revel, was definitely in the mix.

That was revealed Aug. 12 in a filing by White & Case, the main bankruptcy firm for Revel, not long after the decision to close the casino was announced. White & Case has represented Icahn and said it may do so again.

Martin told the judge that he called his contacts at the Icahn Group after that disclosure and was told that the company was "just waiting for the process to start again."

A representative of the Icahn Group, which owns Tropicana Entertainment Inc., including Tropicana Casino & Resort Atlantic City, had no comment.

Burns, who was away last week, said she had hoped to come back to work Monday to a hearing with happier results - namely a sale of Revel out of the auction that was scheduled for last week.

"It's a very sad day for Atlantic City and for the court," said Burns, who also oversaw the bankruptcy of the Atlantic Club, which closed in January.

Last week, Revel's owners moved up the closing date to Sept. 2 from Sept. 10, and they wanted to close even sooner.

To stop the cash burn, which is being funded by their lender, Wells Fargo, Revel's owners wanted to close the casino Tuesday, but the New Jersey Division of Gaming Enforcement denied that request in an order issued Friday.

Source: Philly.com