A bankruptcy court judge has voided the proposed sale of the former Revel Casino Hotel in Atlantic City, New Jersey, to a Canadian firm.
Judge Gloria Burns granted a request by Revel Entertainment to cancel the $110 million sale to Toronto-based Brookfield Asset Management.
The Canadian company had won a court auction for the failed $2.4 billion casino resort. But it backed out when it could not resolve a dispute with bondholders over debt from the construction of the casino's costly power plant.
"They had an outside date to close on Nov. 28," Revel attorney John Cunningham said of Brookfield. "They pre-emptively went to the press and announced that they were walking away from this transaction. Quite simply, they have affirmatively repudiated the contract."
Revel has asked the court to let the auction's runner-up, Florida developer Glenn Straub, buy the property. His Polo North Country Club was the runner-up in the auction, with a bid of $95 million.
The judge scheduled a hearing for Jan. 5 to consider Revel's request to award the sale of the casino to Straub.
"We've got to get the sale process moving," Burns said.
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Straub, who did not attend Friday's hearing, has proposed several uses for the former casino resort. One of them was a so-called "genius academy" at which the world's best minds would look for solutions to society's problems. His attorney did not immediately return a request for comment.
Revel said it is keeping the $11 million deposit Brookfield put down for the sale, something Cunningham said it is entitled to do under the sale contract. Brookfield declined to comment.
Straub was the first bidder to put a deposit on Revel, being selected as a "stalking horse" bidder whose initial $90 million bid set the floor for the auction.
The $2.4 billion Revel opened in April 2012 with high hopes of helping turn around Atlantic City's struggling casino market. But it never turned a profit, filed for bankruptcy twice and closed Sept. 2.
It was one of four Atlantic City casinos to shut down this year amid growing competition in the saturated northeastern U.S. market. A fifth, the Trump Tal Mahal, is scheduled to close Dec. 20 unless a last-minute deal is reached to save it.
