Filings add to complications of Revel bankruptcy

Court filings Friday added some tension to Revel Casino Hotel's next bankruptcy hearing, scheduled for Monday morning in Camden.

At Monday's hearing, Revel's attorneys will ask U.S. Bankruptcy Judge Gloria M. Burns to approve a $3 million break-up fee for Glenn Straub, a Florida investor who last week agreed to pay $90 million for Revel, which cost $2.4 billion to build.

Friday's motion by Revel attorneys contained a key new detail: Additional bids for Revel would have to start at $94 million, an amount that would more than cover Straub's break-up fee.

Also on the agenda Monday is a proposal to set a deadline of Sept. 23 as the deadline for bids by anyone else interested buying the money-losing property with a 130,000 square-foot casino floor and 1,399 hotel rooms.

But the U.S. Trustee, a unit of the U.S. Department of Justice that monitors bankruptcies, objected both to the break-up fee and the short timeline for the sale.

"The revised proposed bid deadline of September 23, 2014 does not provide sufficient time for parties to submit bids now that the hotel and casino are no longer operating," the U.S. Trustee's filing said.

As for the break-up fee, the U.S. Trustee said the fee is not appropriate because it's not clear that it benefits the bankruptcy estate - which faces $447 million in secured claims and millions more in unsecured claims - as is required under case law.

The trustee said that has as a starting point for calculating a break-up fee, Straub "will have to disclose its costs and expenses in putting together the bid."

In a separate matter, a lawyer for Atlantic City filed a motion asking for permission to auction a claim on real estate taxes owed by Revel. As of August 5, Revel owed $19.6 million in property taxes, plus nearly $400,000 in interest,the filing said.

The tax motion is scheduled for consideration on Oct. 7.