December 10, 2014 / 6:40 AM / 5 years ago

Revel deal with Brookfield off; new buyer in sight

(Reuters) - The new proposed buyer for the shuttered Revel Casino Hotel said Wednesday that he will not give up his legal challenge to the auction of the Atlantic City, New Jersey, complex even though the winning bidder walked away from the deal.

Joe Luccathetti (L) and Robert Fitting, employees of the Revel Casino Hotel remove signage from its wall along the boardwalk in Atlantic City, New Jersey September 1, 2014. REUTERS/Tom Mihalek

Revel filed papers overnight seeking approval to terminate its deal with Brookfield Property Partners LP and schedule a hearing to approve the sale to backup bidder Polo North Country Club Inc, an investment vehicle of Glenn Straub.

Brookfield won the auction for Revel with a $110 million bid in October, outbidding Straub. Straub, a Florida developer, had at the time told Reuters he was prepared to bid up to at least $134 million.

Straub has been pursuing an appeal of the order by U.S. Bankruptcy Judge Gloria Burns in Camden, New Jersey, approving the sale to Brookfield.

“We don’t want to give up our rights to appeal,” he told Reuters on Wednesday. He said the appeal would show the auction and sale to Brookfield was “tainted.”

Last month, Brookfield Property made a surprise announcement that it was walking away from its October agreement for the 1,400-room hotel complex, blaming a disagreement over a utility contract.

It did not provide an official notice terminating the deal, leaving some hope the sale could be rescued.

“Brookfield introduced new economic terms that were unachievable, and Brookfield declined to consummate the sale on the terms and timetable that were agreed to in the original Asset Purchase Agreement,” a source close to the sale process told Reuters on Tuesday.

Straub said Brookfield walked away because his appeal was “a slam dunk case.”

Straub has said he wants to reopen Revel as a think tank to tackle pressing problems like hunger.

The casino cost $2.4 billion to build and opened in 2012, but its sleek design and fine dining never caught on in a city associated with bus tours.

Revel was one of four Atlantic City casinos to close this year. The bankrupt Trump Taj Mahal could close on Friday and three other casinos are owned by an affiliate of Caesars Entertainment Corp that is struggling to avoid bankruptcy.

Revel filed for bankruptcy protection for the second time in June. It first filed for bankruptcy in March 2013.

The case in In Re: Revel AC Inc, U.S. Bankruptcy Court, District of New Jersey, No. 14-22654.

Reporting by Supriya Kurane in Bengaluru; Editing by Gopakumar Warrier and Jonathan Oatis

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