Stockton University is free to sell the troubled Showboat
casino hotel property in Atlantic City to whomever it wants, a judge ruled
Monday, freeing the school from a sales agreement with Florida developer Glenn
Straub.
Stockton president Harvey Kesselman said Monday that the
university had "interested buyers."
"The bottom line is that Stockton University is now
free to market and sell the Showboat property, with no further restrictions or
involvement" from Straub's company, KK Ventures, Kesselman said in a
statement. "We are confident that this ruling will lead to an excellent
outcome for the university's students, faculty, and staff, and for the
residents of Atlantic City."
Straub plans to appeal the decision, his attorney said.
Stockton agreed in April to sell the property to Straub
for $26 million, with a 90-day period in which the university could try to
resolve complicated legal questions that had derailed its plans to establish a
campus there.
If the sale did not go through by July 2, the deal was
supposed to be off.
Straub sued the university on July 1, saying Stockton had
entered into the contract in bad faith and had not done its part to try to
clear the legal impediments. KK Ventures sought an indefinite extension of the
sales agreement while other legal problems were worked out.
Superior Court Judge Julio L. Mendez said in Monday's
ruling that there were no specific actions that Stockton failed to do.
"If a specific course of conduct was contemplated
and intended by both parties, it should have been expressly included in the
contract, and it was not," Mendez wrote.
Straub's lawyer, Stuart J. Moskovitz, agreed Monday that
there were no specifics in the contract - "He's absolutely right" -
but said that acting in good faith, as implied in every contract, would have
included pursuing a resolution of the legal issues.
"We expected them to take the steps anybody would
have expected them to take - the steps they told us they would take,"
Moskovitz said.
Moskovitz said Straub, who this year bought the Revel
casino hotel after a legal battle, still wants to buy the Showboat property.
But, he added, his client is wary of spending $26 million on a property that cannot
be used while it remains in legal limbo.
The judge had previously issued a temporary restraining
order preventing Straub from interfering with Stockton's attempts to find new
buyers for the casino property. He made that permanent Monday.
He also ruled that the 90-day contract had properly
ended, dismissing Straub's complaint and freeing Stockton to sell the property.
Straub will get back the $26 million he had placed in
escrow. Stockton will submit a list of attorney's fees to the court, and Mendez
will determine compensation.
Monday's ruling does not resolve the legal issues that
surround the property, including conflicting restrictions on the site's use.
After Stockton bought the Showboat property for $18
million in December, the parent company of the Trump Taj Mahal casino next door
said it would enforce a 1988 covenant that says the Showboat site must be a
casino.
That brought to a halt Stockton's plans to create a
residential campus there.
Caesars Entertainment also had placed a deed restriction
on the Showboat property when the company sold it to Stockton saying the
Showboat could be used for anything except a casino.
A number of other complications have added to the mess,
including Caesars' subsequent bankruptcy. Stockton has filed claims in the
bankruptcy litigation.
Source: Philly.com
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