Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Errors Causing Revel Casino's Downfall Brought To Light
Author: Joel R. Glucksman
Date: May 11, 2015
Key Contacts
Back
Revel AC, Inc. recently filed a disclosure statement that revealed a string of errors that fueled Revel Casino’s Downfall.
The property, which cost $2.4 billion to build, has filed for bankruptcy twice before ultimately being sold for $82 million. Not only was this sale price a fraction of its initial cost, Revel never turned a profit as an operating business. This was one of many factors contributing to Revel Casino’s downfall.
Disclosure of missteps
Amid this situation, the old owners of the hotel and casino outlined the history of missteps that brought the property to its knees. The disclosure statement – which was filed in the U.S. Bankruptcy Court for the District of New Jersey – mainly cites the property’s first management team for this failure, according to The Associated Press.
The disclosure statement pointed out several problems, including expensive food and beverages, assuming too much debt and also difficulties with technology and marketing, the media outlet reported. However, one of the largest challenges identified by Revel’s previous owners was the decision to enter a contractual agreement with ACR Energy Partners whereby the energy provider would both construct and operate the hotel and casino’s power plant.
ACR power plant
Because Revel executives were unable to raise enough funds by themselves to construct a power plant, ACR Energy Partners supplied 75 percent of the financial resources needed to build the facility, according to the news source. In return, the hotel and casino agreed to receive its power, along with hot and cold water, from ACR Energy Partners for at least the next 20 years.
The relationship between Revel and the energy provider has long been a challenge, and the fallout of the agreement made years ago persists to this day, CasinoNewsDaily reported. Maintaining the power plant was costly, and one investor refused to finalize a deal to buy the hotel and casino because of this expense.
More specifically, the contract made between Revel and ACR Energy Partners ended up costing the hotel and casino $2 million every month on top of its energy costs, because Revel had to help pay off the debt it assumed to construct the power plant, according to the AP.
Service interruption
Florida developer Glenn Straub, who recently bought the hotel and casino, has thus far not come to any agreement to receive power from ACR Energy Partners, and the energy provider stopped supplying Revel with services, the media outlet reported.
The power plant was originally intended to help the hotel and casino avoid any power interruptions stemming from challenges with Atlantic City’s main power grid, and also reduce long-term utility costs, according to the news source. Currently, Straub is being fined $5,000 every day his property’s fire detection and suppression systems lack power.
While the previous owners were unable to leverage Revel to generate a profit, Straub has announced some ambitious plans, and has revealed that his decision to buy the hotel and casino is part of a $500 million plan intended to revitalize Atlantic City.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Errors Causing Revel Casino's Downfall Brought To Light
Author: Joel R. Glucksman
Revel AC, Inc. recently filed a disclosure statement that revealed a string of errors that fueled Revel Casino’s Downfall.
The property, which cost $2.4 billion to build, has filed for bankruptcy twice before ultimately being sold for $82 million. Not only was this sale price a fraction of its initial cost, Revel never turned a profit as an operating business. This was one of many factors contributing to Revel Casino’s downfall.
Disclosure of missteps
Amid this situation, the old owners of the hotel and casino outlined the history of missteps that brought the property to its knees. The disclosure statement – which was filed in the U.S. Bankruptcy Court for the District of New Jersey – mainly cites the property’s first management team for this failure, according to The Associated Press.
The disclosure statement pointed out several problems, including expensive food and beverages, assuming too much debt and also difficulties with technology and marketing, the media outlet reported. However, one of the largest challenges identified by Revel’s previous owners was the decision to enter a contractual agreement with ACR Energy Partners whereby the energy provider would both construct and operate the hotel and casino’s power plant.
ACR power plant
Because Revel executives were unable to raise enough funds by themselves to construct a power plant, ACR Energy Partners supplied 75 percent of the financial resources needed to build the facility, according to the news source. In return, the hotel and casino agreed to receive its power, along with hot and cold water, from ACR Energy Partners for at least the next 20 years.
The relationship between Revel and the energy provider has long been a challenge, and the fallout of the agreement made years ago persists to this day, CasinoNewsDaily reported. Maintaining the power plant was costly, and one investor refused to finalize a deal to buy the hotel and casino because of this expense.
More specifically, the contract made between Revel and ACR Energy Partners ended up costing the hotel and casino $2 million every month on top of its energy costs, because Revel had to help pay off the debt it assumed to construct the power plant, according to the AP.
Service interruption
Florida developer Glenn Straub, who recently bought the hotel and casino, has thus far not come to any agreement to receive power from ACR Energy Partners, and the energy provider stopped supplying Revel with services, the media outlet reported.
The power plant was originally intended to help the hotel and casino avoid any power interruptions stemming from challenges with Atlantic City’s main power grid, and also reduce long-term utility costs, according to the news source. Currently, Straub is being fined $5,000 every day his property’s fire detection and suppression systems lack power.
While the previous owners were unable to leverage Revel to generate a profit, Straub has announced some ambitious plans, and has revealed that his decision to buy the hotel and casino is part of a $500 million plan intended to revitalize Atlantic City.