A federal judge in Camden on Friday blocked Glenn Straub's short-term plan for restoring electricity to the former Revel Casino Hotel in Atlantic City
The temporary restraining order by U.S. District Court Judge Jerome B. Simandle prevents Straub's company, Polo North Country Club Inc., from hooking up generators to equipment owned by the building's utility provider, ACR Energy Partners L.L.C.
Straub said he is stuck between Atlantic City officials, who are fining him $5,000 a day for not having electricity in the building, and the New Jersey Department of Environmental Protection, which said the generators he rented do not meet environmental regulations.
"There's not much you can do about it," he said.
Ultimately, if he can't solve the electricity problem, Straub said he'll take his money back to Florida.
"I'll tear the building down," he said, first salvaging everything out of the building and then selling the land.
That stance leaves little reason to believe Straub will strike a deal with ACR, which spent $160 million to build a central utility plant for Revel after Revel's original owners ran out of money and sought outside help to build the plant, on land now owned by Straub.
ACR negotiated an agreement requiring Revel to make fixed payments of $20.1 million a year to pay off $118.6 million in municipal bonds used to finance the utility plant and to provide a return to the local partners who invested $20 million each. Payments for the usage of electricity and hot and cold water were variable.
That deal made it through Revel's first bankruptcy, in 2013, unscathed, but has been under attack from day one in the second bankruptcy, which was filed last June.
Revel AC Inc., the previous owner, and its lender during bankruptcy, Wells Fargo, have resisted providing money to ACR for the debt and equity payments, insisting that they would only pay for the actual cost of the utilities.
Two potential Revel buyers have ended negotiation because, they said, they could not reach a satisfactory deal with ACR, though it's not clear what ACR is demanding or if the equity owners or the bondholders are making it difficult to reach a deal.
About $2.4 billion in debt has been wiped out by financial catastrophe of Revel. Straub's $82 million purchase price equals about 4 percent of the cost of construction.
Yet, one institutional holder of bonds sold by ACR Energy - whose only customer was Revel - still valued them at 45 percent of their face value on Jan. 31, according to a Securities and Exchange Commission filing.