NJ court cancels Stars deal for Atlantic Club
Colony Capital free to seek new buyer for Atlantic Club Casino after temporary restraining order is lifted by NJ judge
The New Jersey Superior Court has upheld Atlantic Club owners Colony Capital’s appeal against PokerStars’ injunction blocking the investment group from seeking another buyer for the Atlantic City casino.
Stars’ parent company the Rational Group had hoped to use the venue as a foothold to re-enter the US market, but the Atlantic Club owners moved to cancel the deal on May 1 claiming the deadline for completion had passed.
Rational Group obtained an extension to the deal, only for Judge Raymond Batten, who originally approved the restraining order, to appear to put the final nail in the coffin of the deal and find in favour of Colony Capital on Friday 18 May.
Rational Group’s head of corporate communications Eric Hollreiser said in a statement that the company was “reviewing [the] ruling” and that the firm “[remained] committed to New Jersey and to contributing to its economy”.
It is unclear whether Stars will seek to appeal the ruling, or even mount a new bid for the Atlantic Club, and the path is now clear for Colony Capital to select a new buyer for the loss-making casino.
NorthJersey.com reports that Altantic Club COO Michael Frawley said he was “pleased” that the court “has dissolved the restraints”, adding that the venue was now “free to build on the tremendous opportunity provided by online gaming.”
The publication also revealed that Colony Capital is pursuing the remaining US$4m of the agreed $15m acquisition price as “a termination fee”.
The Rational Group secured a temporary restraining order blocking Colony Capital from cancelling the agreement earlier this month, only for the investment firm to appeal the decision. Colony had sought to end the process after the operator missed a 30 April deadline for securing a New Jersey gambling licence, arguing that this failure also allowed it to keep the US$11m Stars had already invested in the venue.