Straub spurned again; Union vs. Icahn, Round Two

Revel has been snatched from Glenn Straub‘s grasp, at least for another week, even though Revel AC has switched its position from contentious opposition to Straub to support. Or, as Revel attorney John Cunningham said, they have “82 million reasons” to close the deal. However, Los Angeles-based DTLA Development Group is singing a siren song to Judge Gloria M. Burns. DTLA’s position is that Revel can keep Straub’s $10 million deposit, thereby making their $80 million “offer of funds” the superior bid. Fired back Straub attorney Stuart Moskowitz, “You have no bond, no guarantee, nothing submitted to the court. It’s illusory.” Despite not having been given access to Revel, rival bidder Izek Shomof proclaimed, “We love it, that’s why we’re very interested.”

Straub was not impressed, saying, “This guy from Los Angeles doesn’t know a thing, and I don’t believe he’s a real bidder. He was not there when they asked for a stalking horse bid. He was not there when we had the auction. He was not there when Brookfield [Asset Management] walked away.” He also warned of the very real possibility of liquidation, saying, “that building doesn’t have another six months without a sale.”

(Gee, I’ve got $82 million in cash here and an $80 million “offer of funds” over there. Cash is so overrated.)

Despite the agonizingly protracted sale process, Burns said, “I need to be convinced that it is the best deal the debtors can get. I have a lot of questions but the big question that I have is this in the best interest and I can’t tell that yet.” Burns seems to be convinced that there’s some Daddy Warbucks out there who’s going to come in with a $200 million bid and, if that’s the case, she’s dreaming big-time.

Wells Fargo warned Judge Burns that it couldn’t guarantee continued funding of Revel if Straub’s offer was spurned, having poured $143 million into the defunct megaresort. Burns replied, “Then maybe a conversion to a Chapter 7 is the right way to go,” Straub also lashed back at DTLA with a “cease and desist” letter from his attorney, Larry Zinc, attempting to interdict the company from further contact with Revel tenants. The court deemed that to be lese majeste and even Straub’s side agreed.

Not unpredictably, Revel’s tenants are lining up behind DTLA, which has promised to let them stay put. On the other side, deal broker Ramy Ibrahim of Moelis & Co. said, “300 buyers have come to the table, not one of which have put out what Mr. Straub and Polo North have … [Revel] has been, in my opinion, the most marketed casino asset in the U.S.” (300? Really?) That has, however, dwindled to two letters of interest in recent weeks. Meanwhile, Chief Restructuring Officer Shaun Martin is making out like a bandit, pulling down $495 an hour.

Argued Burns, weakly, “Why not give it a little more time? Approving this sale today, I think, is premature. I’m going to give the parties the opportunity to see what’s out there.” (Meanwhile, interested scavengers are making offers for Revel’s slot machines and furniture.) Even “an inkling of interest” superseded the Straub bid, she contended. That must have been music to the ears of the three DTLA execs who attended the hearing in blue jeans, evidently thinking it was Casual Friday.

The sale proceeds will go preponderantly to Wells Fargo, which has been underwriting the bankruptcy, with unsecured creditors getting a $1.6 million crumb and not a cent going to ACR Energy Partners, owners of the Revel power plant, who have moved for a Chapter 7 liquidation. Calling the Revel sale “an embarrassment of a proceeding” (and it’s hard to argue that point), an attorney for the tenants has moved for Judge Burns to restart the process from scratch, under the auspices of a court-appointed trustee.

Straub has to take the prize for the only bon mot to emerge from this agonizing proceeding. Hearing that rival Shomof had gotten a hard-hat tour of the ACR plant, he replied, “They didn’t give me a hat, damn it.”

* Unite-Here Local 54 is playing a high-stakes game with Carl Icahn. It’s going to the Third Circuit Court of Appeals to argue that, since Trump Entertainment Resorts abrogated their contract, Carl Icahn had no right to strip them of health benefits and other perks. The union’s demands amount to $14.5 million, a hangnail on Trump Taj Mahal‘s financial problems. The latter are so grave that Icahn is demanding special treatment from the State of New Jersey, in the form of $175 million in financial aid. TER and Icahn claim that stiffing the workforce was essential to keep the Taj in business.

The National Labor Relations Board has weighed in behind Local 54, arguing that “companies are generally barred from unilaterally changing employment conditions after a contract has expired, unless there is an impasse in talks.” Considering that Taj workers make an average salary of $13 an hour, it’s no surprise that local politicians have largely weighed in against the tight-fisted Icahn.