Atlantic City, N.J.’s Revel Casino will be sold to private-equity firm Brookfield Capital Partners LP for $110 million, a U.S. judge decided, rejecting Florida real-estate developer Glenn Straub ’s arguments he didn’t get a chance to top the bid.
Bankruptcy Court Judge Gloria Burns thanked Mr. Straub’s company for being the original, or “stalking horse,” bidder with a $90 million cash offer for the closed casino and hotel. But she supported Revel’s argument that it had to take a guaranteed Brookfield bid over the possibility of Mr. Straub’s higher bid.
“The sale was properly conducted and was fair,” Judge Burns said. Several other parties who objected to the sale were satisfied with minor wording changes in the sale order or with preserving their rights to object later, but Mr. Straub fought the sale for more than two hours.
Mr. Straub on Tuesday said he was prepared to top the $110 million cash bid from Brookfield at a Sept. 30 auction, but couldn’t immediately contact his financial advisers and was coping with a serious illness.
“I’m worrying about my life,” Mr. Straub said. His Polo North Country Club Inc. investment vehicle wanted more time to top the $110 million Brookfield bid, he said. Mr. Straub also accused the company of withholding information about competing bids, something Revel lawyers denied in court on Tuesday.
According to testimony on Tuesday from Moelis MC -1.13% & Co. managing director Barak Klein, Revel and its advisers decided not to wait on a potential new bid by Mr. Straub, fearing it could lose the Brookfield bid if it did.
When a 6 a.m. deadline came without a new bid submitted by Mr. Straub, Brookfield was declared the auction winner.
“It was in the best interest for sure,” said Moelis’s Mr. Klein, who advised Revel on the sale. “We had raised the [original] price 20 million bucks.”
Brookfield, which also owns Hard Rock Hotel and Casino Las Vegas, was named the winner of the auction for the 47-story boardwalk property, topping Mr. Straub’s final offer of $95.4 million with its $110 million bid. Brookfield plans to reopen the casino as soon as it gets the necessary licenses and permits.
“Your honor, this is a very important day for Revel and for Atlantic City,” said Revel lawyer John Cunningham at the outset of the hearing. Mr. Cunningham, of White & Case LLP, called Brookfield “the most logical buyer with a strong gaming background.”
Mr. Straub told The Wall Street Journal previously that would appeal the bankruptcy-court sale if it were approved. Mr. Straub is in line to collect a $3 million breakup fee for serving as the lead bidder.
Revel, built at a cost of $2.4 billion, filed for Chapter 11 bankruptcy protection a second time in as many years in June. Before shutting down, Revel employed more than 3,000 people, and its retail, food and beverage partners employ hundreds more, court papers show.