U.S. Bankruptcy Judge Gloria M. Burns on Thursday made two rulings to help clear the way for the sale of the former Revel Casino Hotel in Atlantic City, N.J., to Wellington investor Glenn Straub for $95.4 million.
Burns said Monday she intended to approve the sale to Straub, but a sale order – required before the sale can be completed – was not entered because several outstanding issued needed to be resolved.
Burns settled those issues Thursday.
She said Straub can buy the $2.4 billion property unencumbered by an agreement Revel had with the Casino Reinvestment Development Authority and by leases with restaurants, night clubs and other tenants in the building.
The CRDA agreement gave the development agency the right to do whatever it wanted with a 1.25 percent tax on casino revenues. The money from that tax, paid by all casinos, is used for development projects in Atlantic City.
Without the covenant, Straub can determine what to do with the money from the 1.25 percent tax on casino revenues.
“He does want input on how this money is used,” Straub’s attorney, Stuart J. Moskovitz, told Burns. “He thinks he can to a better job.”
Straub said during a break in Thursday’s hearing that he is interested in developments beyond Revel, including a $108 million indoor-outdoor water park.
Burns also ruled that Straub’s Polo North Country Club Inc. can reject all the tenants’ leases when he buys the property.
Two sections of the bankruptcy code are in conflict with each other regarding the rights of tenants. In simple terms, one section allows the leases to be rejected in their entirety, while another allows the tenants to stay, as long as they keep paying rent.
Straub is open to discussions with the tenants, but he wants to be able to move them around, Moskovitz told the judge.
“Where these amenity tenants are located essentially prevents an appropriate use of the building,” Moskovitz said