Revel AC stalking horse demands halt of auction, figures on other bids

By Kali Hays

New York, Sept. 30 – Revel AC, Inc.’s stalking horse bidder for the sale of substantially all of its assets, Polo North Country Club, Inc., is seeking a court order adjourning the sale auction until Oct. 2 and providing Polo North with documents on additional bids submitted for the assets, according to an emergency motion filed Sept. 29 with the U.S. Bankruptcy Court for the District of New Jersey.

As previously reported, Polo North offered $90 million for the assets under an approved stalking horse agreement with Revel AC.

If Polo North is not the prevailing bidder, the company is entitled to a $3 million breakup fee.

Pursuant to the agreement, Polo North requested information regarding any additional qualified bids Revel AC had received for the assets prior to the start of the Sept. 24 auction, but was refused on multiple occasions by Revel AC’s legal representative John Cunningham of White & Case LLP.

According to Polo North, the Sept. 24 auction was adjourned without explanation after Revel AC and Cunningham, who was conducting the auction, took part in “private closed door meetings” for six hours after it was set to begin.

Under approved bid procedures, all competing bids were due by Sept. 23 in an initial cash amount at least $4 million over Polo North’s stalking horse bid.

Before going off the record at the auction, Polo North said it “repeated its requests for the identity of the bidders, copies of the bids submitted and what modifications were made to the bids. Debtors’ counsel refused to produce any of this information,” the motion stated.

“Polo North requested that, at the least, all bidders be advised as to whom the debtors’ counsel considered to be the current highest and best bid. That was refused.”

Moreover, Polo North said that attempts to get information throughout the initial auction day were met with Cunningham saying “he could conduct the auction any way he wished and that he could modify the court-ordered procedure any way he chose.”

“Debtors’ failure to produce the bids received by the bid deadline, despite an agreement to do so, as well as their conduct on Sept. 24, including violating the order by failing to even start an auction, has damaged Polo North and tainted what should be an open and transparent process,” the motion stated.

Polo North asked that Revel AC be ordered to produce all information on any additional bids it has received by Oct. 1, that the auction be stayed until Oct. 2, that the reconvened auction be conducted by Revel AC’s trustee and that sanctions be entered against the company for violating the bid procedures order.

A hearing is scheduled for Oct. 20.

Revel, an Atlantic City, N.J.-based gaming and entertainment company, filed for bankruptcy on June 19. The Chapter 11 case number is 14-22654.

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