Revel Sale fails - Casino pockets Glenn Straub's $10m Deposit

It was thought that Florida real estate developer Glenn Straub would soon close a $95.4 million deal to buy the Atlantic City Revel. However, Revel owners canceled the arrangement after Straub missed the Monday deadline to purchase the casino in bankruptcy court. By canceling the deal, the Revel gets to keep Straub’s $10 million deposit and is free to look for another buyer.

However, this matter isn’t quite over yet because both sides are expected to be back in bankruptcy court this week, arguing their positions to Judge Gloria Burns. Revel owners are hoping that the terminated deal stands and they get to keep the $10 million deposit, while Straub’s lawyers will argue that they need more time to dissect whether or not buying the casino is ultimately in their best interests. Straub’s Polo County North is specifically worried about the HQ nightclub wanting to remain as a tenant in the Revel, and the casino’s lone utility supplier threatening to shut off the power.

Assuming the deal is officially terminated, this would mark the second buyer that’s lost their deposit. Brookfield placed the winning $110 million bid in bankruptcy court (ahead of Straub’s $95.4m), but they chose to walk away when they couldn’t come to an agreement with bondholders on the casino’s debt to the utility company.

HQ nightclub further complicates the issue with Polo County North because they argue that they’re good tenants who ran a profitable business inside the Revel. A deeper reason is that HQ doesn’t want to lose the $16 million investment in the property, only to see it “turned into a Hard Rock Cafe.”

Aside from keeping the $10m deposit, it’s unclear why Revel ownership wants their deal with Straub to end. The latter party has caused some issues, including arguing in court that he should only have to pay $87m instead of $95.4m. But if the Revel walks away from this arrangement, there are certainly no guarantees that they’ll find a better suitor.

The casino initially opened to much fanfare in April 2012, with many hoping that the $2.4 billion casino could bring a new era of resort-style gaming to Atlantic City. However, the casino lasted just two and a half years before shutting down last summer. And now, buyers are only willing to pay a fraction of what the massive casino initially cost to build.