The dispute between the new owners of the former Revel casino and the ACR Energy Partners continues to go on as both parties are unable to reach a mutual agreement. ACR Energy Partners used to be the sole power supplier for Atlantic City’s Revel casino and was paid millions of dollars each month to provide electricity and water to the casino.
When Florida real estate developer Glenn Straub completed the purchase of the Revel casino for $82 million he made it clear that he had no plans to run up such high monthly costs by continuing with ACR Energy Partners. Upset at being discarded by the new owners, ACR Energy Partners suddenly decided to stop supplying power to the casino and put Glenn Straub in a tight spot.
The Revel casino which was constructed at a cost of $2.4 billion suddenly found itself without water and power as ACR Energy Partners refused to turn on the power. State authorities were concerned about the safety of the building as the fire department raised a red alert stating that a lack of water caused serious risk as it prevented them from doing their job in case of a fire. The city decided to fine Straub $5,000 for each day the casino failed to find an alternate source of power.
Straub tried to use alternative means to introduce a new power supply but all his attempts failed as they were blocked by ACR Energy Partners. The matter was taken to the federal courts and in the end a temporary arrangement was worked out between ACR Energy Partners and Straub where the casino would be provided with limited power and Straub would pay fees to the Bank of New York Mellon who would collect the cash on behalf of ACR Energy.
Now the Bank of New York Mellon has raised a charge stating that Straub is paying ACR Energy partners a lesser rate and would cause the company to incur losses. The bank is currently acting as a trustee for $119 million in ACR owned bonds.
In a statement, Guy Amoresano a lawyer for the bank said “At present, ACR’s viability as a going concern is in serious jeopardy. While the bondholders have thus far permitted BNYM to allow the use of its cash collateral to fund continuing operations, the bondholders anticipate that they may be forced to withhold consent in the near future, particularly if ACR and Polo North do not come to an agreement concerning ACR’s provision of energy to Revel that contains commercially reasonable terms and provides for full compensation to ACR for the power it supplies Polo North.”
Straub’s lawyer disputed those remarks stating that they were making full payments based on the amount agreed and it should be more than sufficient to cover overhead, all costs and profit.