Revel utility misses bond payment; wants to shut off building

ACR Energy Partners L.L.C., which owns and operates the central utility plant attached to the bankrupt Revel Casino Hotel, did not have enough money to make a $6.9 million interest payment to bondholders due Dec. 1, according to a regulatory filing.

Because of its money squeeze, ACR now wants to shut off service to Revel boardwalk complex.

The utility plant, which supplies hot and cold water to heat and cool the now-vacant Revel, as well as electricity, has played a key role in efforts to sell the $2.4 billion casino, which filed for its second bankruptcy in June after losing money since opening in April 2012.

Brookfield Asset Management walked away from its deal to buy Revel for $110 million after the Toronto real estate investment company failed to reach a money-saving deal with ACR bondholders owed $118.6 million.

Brookfield, which lost a $11 million deposit when it walked away, sought a cut in the $1.7 million monthly debt and equity payments that Revel agreed to pay ACR Energy in 2011.

Those payments are in addition to variable energy costs. Revel itself has argued in bankruptcy court that it should only have to pay the variable energy costs, not the debt and equity payments.

The backup bidder, Florida investor Glenn Straub, has already said he would reject the payment arrangement with ACR, though it is not clear how he would operate the building without the utility plant.

Following the formal notice that Straub would reject the ACR agreement, ACR last week asked for court relief that would allow it to stop supplying utilities to the building.

Turning off the utilities would have disastrous consequences for the building, experts have said.

ACR's request to turn off the utilities is scheduled to be considered in bankruptcy court in Camden on Monday, the same day a motion to approve the sale to Straub for $95.4 million is on the docket.

Straub said in a court filing last week that he wanted a price cut, to $87 million, but it's not clear what legal standing he has renegotiate the price.

Source: Philly.com