(Reuters) – An affiliate of Brookfield Asset Management won the auction for Atlantic City, New Jersey’s bankrupt Revel Casino Hotel with a US$110 million bid, but within hours the losing bidder told Reuters he planned to fight the sale.
Asked if he would challenge the auction result in court, Florida developer Glenn Straub told Reuters by phone: “Absolutely.”
The auction for the shuttered hotel and casino, which cost US$2.4 billion to build, concluded early Wednesday behind closed doors in the New York law office of White & Case. Straub said he was in the process of analyzing the Brookfield bid when the auction was declared over.
“I’ve never seen bankruptcy bidding ever that was so one-sided,” he told Reuters. “They said they weren’t going to accept any more offers unless you want to do it right now with no time for anyone to look at anything.”
He told Reuters he was prepared to bid up to at least US$134 million. He said he would challenge the sale next week in the U.S. Bankruptcy Court and through appeals courts if necessary.
Brookfield’s spokesman and Revel’s spokeswoman declined to comment on Straub’s challenge to the auction process.
Revel filed for its second bankruptcy in June, and was put up for sale as a way to raise money to repay its creditors.
Revel and three other Atlantic City casinos have closed this year, putting thousands out of work. The Revel was hailed by New Jersey’s leaders in 2012 as a way to reinvigorate the seaside resort by emphasizing fine dining, stunning design and entertainment over the traditional bus tours and buffets.
But it never caught on, and Atlantic City’s customer base has dwindled as neighboring states have legalized gambling as a way to boost government tax revenues.
Brookfield Property Partners, the Brookfield affiliate that won the auction, suggested it plans to reopen as a casino. It said in a statement it anticipated “material synergies” between Revel and two of its other gaming-related investments, the Atlantis Paradise Island resort in the Bahamas and the Hard Rock Hotel and Casino in Las Vegas.
Straub had said he wanted to create a university at the site to attract the world’s brightest minds to tackle social problems such as hunger. If Brookfield is declared the winner, Straub still will collect a US$3 million breakup fee for acting as the initial bidder to jumpstart the auction.
He told Reuters on Wednesday the breakup fee was never his goal. “We were there to buy the facility.”
A hearing to approve the sale is scheduled for Tuesday, Oct. 7, in the U.S. Bankruptcy Court in Camden, New Jersey, where Judge Gloria Burns is overseeing the case.
Brookfield Asset Management of Toronto, Canada, manages Brookfield Property and uses the affiliate, which was spun off last year, to invest in real estate.
The case is In Re: Revel AC Inc., U.S. Bankruptcy Court, District of New Jersey, No. 14-22654.
(Reporting by Tanya Agrawal in Bangalore and Tom Hals in Delaware; Editing by Kirti Pandey, Meredith Mazzilli and Chris Reese)
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