The bankruptcy auction of Atlantic City's shuttered Revel
Casino Hotel has been anything but a run-of-the-mill affair.
The auction started last Wednesday, but was adjourned
after six hours because of the start of a Jewish holiday. It was to resume
Tuesday.
Meanwhile lawyers for Glenn Straub, the Florida investor
who set an auction baseline with his $90 million bid, filed a motion seeking
another delay, alleging that there's been too little transparency in the sales
process.
Then, Tuesday morning, just as the sale was scheduled to
get underway again, Revel lead bankruptcy lawyer, John K. Cunningham, revealed
in a court filing that Brookfield Asset Management was among the bidders.
That disclosure came in a declaration lawyers in his
situation have to make about potential conflicts of interest. Cunningham's
firm, White & Case L.P., represents Brookfield, of Toronto, in a joint
venture in India, the filing said.
Brookfield has $181 billion in assets under management,
according to its website. It owns two casinos, Hard Rock Hotel & Casino in
Las Vegas and Atlantis Paradise Island in the Bahamas.
The disclosure of Brookfield's involvement raises a
question about whether Brookfield had submitted a qualified bid by the Sept. 23
deadline. If so, it's not clear why Cunningham did not make his disclosure
until Tuesday.
If Cunningham accepted the Brookfield bid after the
deadline, there has to be good cause, according to an expert with experience in
such auctions.
Other aspects of the auction are also unusual.
Typically at the beginning of an auction - in this case,
last Wednesday - the person conducting the auction would have told all the
bidders how many qualified bids had been received by the deadline before
meeting privately with bidders to establish a common baseline for bids that
have different payment provisions.
According to Straub's attorney, Stuart J. Moskovitz,
Cunningham did not do that and has refused to provide any detailed information
requested by Straub.
"The lack of transparency here is unheard of,"
Moskovitz said.
Cunningham said last week that he was following the
procedures in the court's auction.
Straub's motion, dated Monday, but not entered on the
docket until Tuesday, requested a delay in the auction until Thursday at 9
a.m., for copies of any other bids that were received, and for the U.S. Trustee
to conduct the auction rather than Revel's bankruptcy attorney.
However, Straub's company, Polo Country Club North Inc.,
does not likely have the standing it would need in bankruptcy court to make
such demands.
During a Sept. 15 Revel bankruptcy hearing, Judge Gloria
M. Burns told Moskowitz, that the bidder didn't actually have standing in
court.
She accepted input from Straub on the scheduling of the
auction, though, because of the desperate state of the months-long effort to
sell Revel, which generated a single bid, Straub's.
If someone else outbids Straub, he will be paid a $3
million breakup fee.
Cunningham told Straub last week that Straub had
"earned the breakup fee," according to Straub's court filing Tuesday.
Source: Philly.com
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