- Associated Press - Wednesday, September 23, 2015

ATLANTIC CITY, N.J. (AP) - As if things couldn’t get any more bogged down in the morass of litigation that’s helping to keep Atlantic City’s former Revel casino shut, yet another lawsuit has been filed.

This one is on behalf of investors claiming they were cheated out of millions because they claim the casino’s power plant lied about the status of bonds that paid for its construction. They also want a judge to prohibit ACR Energy Partners from selling the power plant to anyone but them.

ACR declined comment, saying it has not yet been served with a copy of the suit.

The lawsuit from two investment funds, Rosemawr Municipal Partners Fund and Rosemawr Capital I, accuses ACR of hiding the fact that it had defaulted numerous times on its financial obligations.

The funds say they either never would have bought $35 million worth of bonds, or would have done so at a much lower price. The bonds subsequently lost 70 percent of their value, according to the lawsuit.

“Defendants fraudulently misrepresented - indeed, flatly lied about - material matters and purposefully concealed information that they knew was material to plaintiffs and the other bondholders in order to enrich themselves,” the funds wrote in their lawsuit, filed in U.S. District Court on Sept. 16.

The lawsuit is just the latest in a torrent of litigation that has so far prevented the former casino, which shut down just over a year ago, from reopening.

Even before he bought the casino out of bankruptcy court in April, Glenn Straub was sparring with ACR over the price the company wanted to charge for utility service to the casino. Two days after he bought it, ACR cut off service to the plant in the absence of a contract to provide service there.

Both sides have sued each other in litigation that remains unresolved, even though a state agency ordered power partially restored to keep fire safety and aviation warning systems working in the 710-foot-tall building, the second-tallest in New Jersey after the Goldman Sachs building in Jersey City. An interim agreement approved by a federal judge is keeping the temporary power arrangement in place for now.

Straub is also fighting in court with numerous former business tenants at Revel who want to be able to reopen their businesses if and when the building ever reopens. Straub wants the ability to cancel leases of businesses he doesn’t want.

He also sued Stockton University over the failure of a deal for the school to sell him the former Showboat casino, which Straub had hoped to use as an alternative power source for Revel by tapping into the Showboat’s utility infrastructure. That lawsuit was dismissed, but Straub is considering an appeal.

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Wayne Parry can be reached at https://twitter.com/WayneParryAC

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