Revel sale could be threatened by appeals court ruling

A three-member federal appeals court panel in Philadelphia issued an order Friday that could derail the scheduled sale of the bankrupt Revel Casino Hotel in Atlantic City to Florida investor Glenn Straub.

The order allows the sale of Revel for $95.4 million to go forward, but not on the terms Straub has demanded.

"I don't know what the order means to us until we check with all the attorneys," Straub said after learning of the ruling.

Revel's sales agreement with Straub has a Monday deadline, which means Straub must decide quickly how to proceed. If he does not buy Revel on Monday, he could lose his $10 million deposit. Straub wants to buy the property with no obligations to the restaurants, nightclubs, and other businesses that had leases to operate in the hotel.

IDEA Boardwalk L.L.C., which spent $16 million to outfit a bar and two entertainment venues in the hotel, sought a stay of a U.S. Bankruptcy Court sale order that allowed Straub to buy Revel on those terms, so the company could pursue an appeal that could protect its property rights.

IDEA Boardwalk, a subsidiary of Ironstate Development Co., of Hoboken, N.J., had lost its bid in U.S. District Court last month, but scored a victory Friday.

The U.S. Court of Appeals for the Third Circuit reversed the District Court order. Its ruling means that IDEA Boardwalk cannot be stripped of its property rights until there is a final ruling on its appeal.

"This court takes no position on the merits of the appeal pending in District Court," said the order, signed by Circuit Judge Thomas L. Ambro.

Attorneys for IDEA Boardwalk declined to comment. Revel's attorneys did not respond to a request for comment.

Friday's ruling applies only to IDEA Boardwalk, not utility provider ACR Energy Partners L.L.C. and a group of restaurants.

Revel's attorney said Friday during oral arguments that a stay of the sale on Straub's terms could cause irreparable harm to the Revel, which has been for sale since November 2013.

If Straub were to abandon the deal, Revel might be able to keep Straub's $10 million deposit, but that money won't sustain the casino's bankruptcy case for long.

Without Straub as a buyer, Revel's bankruptcy case would likely collapse into a liquidation, with a U.S. bankruptcy trustee in charge of selling the complex, Revel's attorney said Friday.