A federal judge in Camden on Wednesday rejected a bid by tenants of the Revel Casino Hotel building to block the property's sale on terms demanded by buyer Glenn Straub.
"This is just one more step in getting this closing to occur," Straub said.
Straub, who agreed to pay $95.4 million for the Atlantic City property, built at a cost of $2.4 billion, wants to buy it without assuming its leases and other agreements with nightclubs, restaurants, and other tenants, or the firm that owns Revel's central utility plant, which supplies electricity and hot and cold water to the building.
The tenants, including IDEA Boardwalk L.L.C., which operated Revel's HQ Beach Club, asked U.S. District Judge Jerome B. Simandle for a stay on a bankruptcy judge's Jan. 8 sale order so they could appeal it.
Simandle's rejection of the request means the tenants are likely to appeal his decision to the Court of Appeals for the Third Circuit in Philadelphia.
The clock is ticking on Straub's agreement to buy the Revel. Under certain circumstances, if Revel attorneys do not complete the sale by Feb. 7, the Florida investor could walk away and keep his $10 million deposit.
If the tenants appeal, it's possible that they could be required to post a significant bond to protect the Revel bankruptcy estate in case the sale to Straub falls apart.
In upholding U.S. Bankruptcy Court Judge Gloria M. Burns' sale order, which allows Straub to buy the property unencumbered by the leases and other agreements, Simandle said in his 50-page opinion that the tenants did not convince him that they were likely to win their appeal or that they would suffer irreparable injury, among other factors.
The possibility of "substantial harm" to Revel's bankruptcy estate, if he granted a stay, weighed more heavily in the judge's decision.
The tenants "ignore the fragility of [Revel's] existence and the uncertainty concerning the ultimate consummation, if any, of the sale" to Straub, Simandle wrote.