Sobe Seeks Rehearing of Atlantic Club Bankruptcy Sobe Seeks Rehearing of Atlantic Club Bankruptcy
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Key Takeaways
  • The losing bidder in the bankruptcy auction of the Atlantic Club in New Jersey, Sobe Holdings LLC, has said it will ask the judge to hold a rehearing of their bid to purchase the casino and hotel.
  • Sobe bid nearly $1m more than Caesars and the Tropicana but the judge decided their bid was higher risk.
  • Sobe wants to keep the Club open, whereas Caesars will close it in January with the loss of all jobs.

The losing bidder in the bankruptcy auction of the Atlantic Club in New Jersey has said it will ask the judge to hold a rehearing of their bid to purchase the casino and hotel, according to a reported in the PressofAtlanticCity. Attorneys for Sobe are expected to formally present their request for a rehearing on Monday. Should the rehearing be refused, an appeal is expected.

Sobe Holdings LLC bid nearly $1m more than Caesars Entertainment and the Tropicana, but their bid was rejected as being of higher risk. Representatives for Sobe asked Chief Judge Gloria Burns to vacate the proceedings, but Burns refused and approved the lower bid by Caesars and the Tropicana that would lead to the eventual closing of the Atlantic Club.

Once the Tropicana has stripped out the gaming machines, Caesars plans to close down the casino and hotel and currently has no plans to re-open it. All the employees will be made redundant. Sobe contests the argument that its bid was riskier, and says it wants to keep the club open—after refurbishment—and maintain it as a major employer.

Sobe owns the Deauville Beach Resort in Miami Beach, Florida and would probably rename the Atlantic Club as the Deauville Casino Hotel.

The troubled casino sector is expected to benefit from the reduction in competition as a result of the closing of the Atlantic Club—one of the main motivations behind Caesars’ purchase.

New Jersey Governor Chris Christie is considering licensed gambling in other areas of the state if the existing casinos do not start producing more tax revenues. Christie recently warned: “It’s obviously a critical year because we need to begin to see progress in Atlantic City or we’re going to start considering alternatives.”

PokerStars’ attempts to buy the Atlantic Club were rebuffed last year. Commenting on the bankruptcy sale of the Atlantic Club, Eric Hollreiser, Head of Corporate Communications for the Rational Group, said: “At this time last year, PokerStars reached an agreement that would [have] secured a new future for the casino, saved the jobs of 1,800 employees, and injected new blood, new technologies, and new finances into the Atlantic City economy.”