Power plant seeks to block Revel sale, liquidate property
ATLANTIC CITY, N.J. (AP) -- A power plant at the heart of two failed deals to sell Atlantic City's former Revel casino is seeking to block the latest attempt to sell the property.
ACR Energy Partners wants a bankruptcy court judge to cancel the latest proposed sale to a Florida developer, and appoint a trustee to liquidate the property instead.
In a motion filed Wednesday, ACR wants the court to convert Revel's bankruptcy from a Chapter 11 restructuring case, in which the business would re-open under new ownership, to a Chapter 7 case, in which a trustee would liquidate the remaining assets.
The company says the latest sale contract to Florida developer Glenn Straub would leave nothing for most creditors, and would cost the power supplier $32 million.
Straub's Polo North Country Club is paying $82 million in cash -- which has already been put into an escrow account -- for Revel, after his previous deal to buy it for $95.4 million failed to close. In November, a Canadian firm backed out of a $110 million deal to buy Revel, largely due to unpaid debt from construction of the power plant that the buyer did not want to assume.
"The sale and compromises will leave the estates wholly insolvent, and administrative creditors, such as ACR Energy, with nothing," wrote ACR, which is the sole supplier of electricity, heat and air conditioning, and water to Revel. "To make matters even worse ... it has been coerced into providing financing to these estates, and is now being subject to the handcuffs inserted into the latest version of an oppressive purchase agreement."
It said a court-appointed trustee could "use its powers to fund a new sale process with a fresh set of eyes."
"With the whirlwind surrounding the sale process coming to a halt, then stirring up again in tornado-like fashion, it is important to take stock of where the debtors actually stand," ACR wrote. "Having shuttered their operations and terminated over 4,000 employees and having incurred over $12 million in professional fees ... the debtors are seeking to close on the sale to Polo North, albeit at a substantially reduced price for which no justification has been provided."
Straub's lawyer did not immediately return a call seeking comment Thursday.
A judge will consider the request -- and the proposed sale -- on Wednesday.
ACR calls the $82 million sale to Straub "hopelessly flawed," noting that the casino's lender, Wells Fargo, has set aside just $1.35 million to cover $50 million in creditor claims.
Straub's latest plans for the property include a scaled-down casino, and a medical-spa treatment facility. He has previously spoken of opening a water park there, as well.
Revel cost $2.4 billion to build, but closed on Sept. 2 after little more than two years of operation, never having turned a profit.
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