Revel utility supplier fights latest Straub deal

Wednesday brought yet another dramatic twist in the long and tortured bankruptcy case of Revel Casino Hotel.

Revel's utility supplier - saying it is owed more than $20 million since June and stands to get nothing from the latest deal with Glenn Straub - asked the judge to put a liquidating trustee in charge.

"The debtors and their secured lenders have been afforded nearly free rein over these cases and the debtors' assets since the petition date, with absolutely nothing to show for it," the ACR Energy Partners L.L.C. filing said. "The time has come to end the debtors' protection under Chapter 11."

The move came a day after Revel said it had reached a new deal to sell the Atlantic City property to the Florida developer for the reduced price of $82 million.

ACR, which spent about $160 million to build Revel's central utility plant to supply electricity and hot and cold water, has $118.6 million in municipal bond debt. Its lawyers complained that it is subject to "handcuffs inserted into the latest version of an oppressive purchase agreement."

Specifically, ACR asked U.S. Bankruptcy Judge Gloria M. Burns to convert the Revel bankruptcy to a Chapter 7 case, which means a court-appointed trustee would assume management of the case from Revel.

Burns has consistently decided in favor of Revel's lawyers and against creditors and other parties, making it unlikely that ACR will succeed if its motion is heard Wednesday, as requested. That is the date of the next emergency sale hearing.

ACR said that a Chapter 7 trustee "could immediately halt the ongoing excessive expenditures" and "use its powers to fund a new sale process with a fresh set of eyes."

The latest monthly operating statement for Revel, filed last week, shows a total of $17.4 million for all professional fees from the June 19 filing through Dec. 31. That includes $8.8 million for Revel's bankruptcy lawyers and $3 million for the lawyers for lender Wells Fargo.

In addition, Revel has paid $647,278 in fees to four Revel directors through Dec. 31.

Meanwhile, Wells Fargo is only willing to set aside $1.35 million to settle many millions more in unsecured claims.

The ACR filing said the net value of the latest Straub deal to the bankruptcy estate is just $64.8 million, though Straub said it's not clear how the company arrived at the figure.

"Maybe they figured out how we're going to make a little more money on the side," Straub said.

He said he still doesn't have a deal with ACR that would allow the company to continue supplying power if he buys the property as planned March 31.

"They are going to have to produce it for a whole lot less money" than for Revel, he said.

If there is no deal, he said, he can bypass ACR: "We don't ever tie ourselves down."