One of the most dramatic deals in Atlantic City casino history could finally be resolved Friday while a bankruptcy court in Camden considers whether or not to authorize Glenn Straub’s bid. Back in February, Straub finally managed to cut a deal with Revel’s current owners and agreed to pay $82 million for the bankrupt casino.
Getting to this stage was difficult as a number of issues held up the deal. At one point it looked as though all bets were off when Straub’s initial offer was allowed to lapse. The two parties were able to resolve their issues and, in somewhat of a surprising turn of events, Straub was given another shot at purchasing the property.
Eleventh hour bidder casts additional uncertainty
All looked to be set until a last minute coup by Izek Shomof threw things into chaos. After submitting a letter of intent to purchase the shuttered venue back in February, the LA developer eventually came through with a formal offer of $80 million.
The entry of a new bidder prompted Revel to postpone a deal with Straub during a hearing last week. As if that wasn’t enough drama, Shomof and his associate, Leo Pustilnikov, made an appearance at the hearing and seemingly stirred up some tension with Straub.
Today’s hearing is unlikely to bring a resolution to the story, but it might. Judge Gloria Burns will have the final say in today’s proceedings and she may well suggest the sale to Straub is the best course of action.
Casino’s future is largely in judicial hands
However, Burns also has the power to stall the process further by ruling that Revel AC should be given more time to discuss potential terms with Shomof and any other bidders that want to enter the mix.
Alternatively, Burns could bring an end to both investors’ dreams and appoint a trustee and liquidate the casino. That outcome would be a disaster for the casino as it would become virtually worthless to potential investors. Moreover, it would rob Atlantic City of another high profile venue.
Back in 2012 investors spent $2.4 billion to construct Revel AC, but just two years later the venue was shuttered due to falling revenue. Although a takeover by Straub or Shomof isn’t guaranteed to reverse the fortunes of the beleaguered casino, it would certainly be a better result than complete liquidation.
For his part, Straub has pledged to invest at least $20 million into Revel and if he can improve the venue’s performance, then he wants to invest a further $500 million into Atlantic City itself. Working on the premise that he wants to restore the coastal venue to its former glory, Straub has said he’d be willing to invest a huge amount of cash to make AC a thriving entertainment hotspot.
However, all that is only possible if he’s granted permission to purchase Revel and today’s hearing could be the first step in that process.