Stricken Revel has a buyer - for $90M in cash

Revel AC Inc. said in a bankruptcy court filing Wednesday that it had reached a deal to sell its $2.4 billion Atlantic City property to South Florida developer Glenn Straub for $90 million in cash.

The deal was reached Friday, according to the filing. That was less than a week after Revel closed, putting nearly 3,000 people out of work.

The offer is less than 4 percent of the casino's original price tag.

"It's not going to be just a casino," Straub said. "There's four people that would make excellent casino operators, but that building is much, much more than just a casino."

Revel said that with Straub's bid in hand - setting a baseline - the company would restart its auction process.

The company asked a bankruptcy judge in Camden to set 4 p.m. Sept. 23 as a new bid deadline. The auction would occur the following morning in New York City.

Subject to court approval, Straub would be due a $3 million breakup fee if Revel strikes a deal with another buyer, according to the filing.

Straub's purchase is not contingent on receiving a gaming license, which means he likely has a plan that does not include the building's ill-fated casino floor. Straub would not borrow money to complete the deal, the filing said.

Straub owns the Palm Beach Polo & Country Club in Wellington, Fla.

Polo North Country Club Inc. is the name of the legal entity that has the agreement to buy Revel, which opened in April 2012 and filed for its second bankruptcy in June.

Revel's owners, led by a group of hedge funds, closed the casino hotel after two attempts last month at a bankruptcy auction failed to generate solid bids. It is not clear whether Straub was one of the parties Revel was negotiating with at the time.

Speculation by industry observers and analysts over who might buy Revel had long centered on casino operators with deep databases of customers, and the ability to attract them to the silvery property at the north end of Atlantic City's Boardwalk. The absence of a customer base was a glaring weakness for Revel when it opened.

Revel was a financial disaster as a casino, posting nearly $300 million in operating losses after it opened. But as a resort hotel it had avid fans, who raved about the ocean views from the rooms and liked the two-acre landscaped patio on the 11th floor.

Such features were supposed to spur a new era in Atlantic City, where casinos had been steadily losing market share to competitors in Pennsylvania, New York, and Maryland.

But too many people were turned off by $22 hamburgers and $70 breakfasts.

Instead of setting a new standard for profitability in Atlantic City, as its managers promised before being licensed, Revel crashed in bankruptcy less than a year after opening.

Revel's first bankruptcy, in 2013, wiped out $1.23 billion in Wall Street debt. When Revel filed for its second bankruptcy in June, the casino had $447 million in secured debt.

Straub's $90 million offer works out to just 20 cents on the dollar, based on that most recent debt calculation.

Source: Philly.com