Revel AC reaches settlements on $23.6 million of construction claims

By Kali Hays

New York, Aug. 4 – Revel AC, Inc. is seeking court approval of settlement agreements with several claimants holding construction liens against the company together exceeding $23.6 million , according to a Friday motion with the U.S. Bankruptcy Court for the District of New Jersey.

The claimants were involved in the construction of the company’s gaming and resort facility located in Atlantic City, N.J., and include Tishman Construction Corp. of New Jersey; Rich Barham, LLC; Stone Concrete, Inc.; Philadelphia D&M, Inc.; and Imperial Woodworking Enterprises, Inc. and Imperial Woodworking Co.

All of the construction claimants maintain that their claims have priority over all other lender claims against the company.

According to the motion, Revel AC believed the construction liens to be “grossly inflated” and estimated the accurate amount of the claims to be $1.6 million.

Furthermore, under the company’s credit agreement related to its proposed debtor-in-possession financing, the DIP lenders must prime all senior third-party liens or Revel AC will be in default and the lenders may terminate any obligations under the agreement.

Under separate proposed settlements, Tishman has agreed to release its lien in return for Revel AC releasing all counter claims, Rich Barham will be allowed to retain $230,000 in withheld funds for damages and agreed to release its claim, Stone Concrete agreed to accept a $600,000 payment for the release of all claims and Imperial and Philadelphia D&M agreed to accept a $1.7 million payment and to release current claims while retaining the right to future claims.

Revel AC said that the agreements are in the best interest of the company as the claims “likely would have not been resolved without protracted litigation” and said that the company “cannot afford to wait or incur the costs to resolve the disputes.”

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

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