The road to a future of any sort for the troubled former Revel Hotel Casino remained stubbornly murky Thursday as the thought process and intentions of would-be buyer Glenn Straub came under the microscope in U.S. Bankruptcy Court in Camden.
An attorney for Los Angeles developer Izek Shomof, meanwhile, said his client remained interested in submitting a formal offer for the Boardwalk property, which he described as "already a train wreck."
"We're not worried about Polo North," Kurt Gwynne said of Straub's company. "We're just focusing on ourselves."
Jurisdictional issues continued to bog down the process, now on a fourth request to U.S. Bankruptcy Judge Gloria Burns to approve an $82 million sale of Revel, the closed resort in Atlantic City that cost $2.4 billion to build.
Burns put off until 11 a.m. Friday a decision on whether she can even approve a sale while appeals are pending in federal court. If she decides that she can, Burns said, she would then rule on the sale.
Her approval would lock in a March 31 closing date but would compel Revel to consider other bids until then.
Although attorneys for Revel and Wells Fargo, which is financing the bankruptcy process, pleaded with the judge to approve the sale to Straub, the judge continued to hold out the possibility that other bids would emerge.
Straub took the stand at the request of Warren Martin, the attorney who represents tenants who oppose the sale to Straub. His rambling explanation of his decision-making process only served to underscore the uncertainty.
"I run a management team for my daughter, for the foundation," he said, his eyes mostly squeezed shut as a courtroom full of attorneys watched.
"I just don't do economics," Straub said. "I do things for what's right."
At times, Straub appeared near tears, talking of his foundation, his health, his daughter, his projects in Miami, his goals of "helping . . . the world."
Ultimately, he said, "I don't think I'm going to walk away from $82 million."
When he was finished, a heavy silence hung in the courtroom.
Gwynne said his client remained undeterred by the tortuous case and continued to negotiate with ACR Energy, a stumbling block in prior offers.
Gwynne characterized Straub's testimony as "incomprehensible" and also said Straub had called his client offering to transfer his bid, leading Revel attorney John Cunningham to warn of "collusion."
Martin argued that Straub's history, actions, and testimony indicated that he was not a "good-faith" bidder qualified to take possession of the property.
The judge responded, "Because you don't particularly like the buyer, then his money shouldn't be considered?"
The current sale order was a modification of an agreement to sell to Straub, cutting the price from $95.4 million to $82 million. But because the earlier sale order is being appealed in federal court by tenants of Revel fighting to stay under a new owner, the judge said she was unsure if she had authority to approve a modified order.
Doubt was also cast on whether Straub would close on the property March 31 even with an approved sale order and $82 million in escrow. Straub said before the hearing that obtaining title to the property would be difficult with pending litigation from spurned tenants such as the HQ Nightclub as well as ACR Energy, which supplies energy to the property.
Others argued that Straub would complete a "phantom closing" at best. Straub does not have a deal with ACR and has spoken of resorting to alternate energy sources such as generators.
Cunningham told the judge that despite a flurry of interest from various last-minute bidders, there was just one actual bid in hand, the one from Straub.
Tom Kreller, attorney for Wells Fargo, which stands to collect most of the proceeds from any sale, told the judge, "There is no more time."
Burns also said she felt a "time urgency" to settle with the "high season" of Atlantic City approaching.
Kreller said urging the court to accept the $82 million offer was unpleasant but there were few options.
"There's no fork, and there's very little road," Kreller said.
Robert Dakis, attorney for a handful of restaurants inside Revel, begged the judge not to approve the sale to Straub, to allow other bidders to firm up offers. Straub has not indicated interest in continuing their leases.
Dakis questioned Straub's intent to close on the property on March 31, given his history of litigation and failure to close on an earlier $95.4 million bid. He suggested the judge schedule an auction inside her courtroom for later this month, a proposal the judge rejected.
Ramy Ibrahim, an investment banker who has been marketing the property, said the company had had inquiries with 19 parties in the last week, including seven new ones.
Stuart Moskovitz, the attorney for Straub, stressed to the judge that his client's bid was the only legitimate offer. He said the case would convert to liquidation if his client's bid was spurned.
"Nobody else has come forward and put even a dollar at risk," he said.
The judge wondered at one point if the case would end up as a foreclosure in state court. And she acknowledged that even with an approved sale, nothing was a done deal.
"If [Straub] doesn't close, how do we know anyone else will either?" she said. "Each time we come back here, it's pretty much at the same juncture."