What do you do if you’ve got a purchase agreement with Colony Capital and the latter allegedly reneges on you? If you’re Rational Group, which thought it had a $15 million deal in place to purchase the Atlantic Club Hotel, the answer is simple: “We’ll see you in court.” It would certainly be in character of the cornered and incompetent Tom Barrack (pictured) to think he could take $11 million outright from Rational, then turn around and cut a deal with another casino buyer. After all, this is the man who brought ruin upon the ex-Atlantic City Hilton by paying an exuberant $513 million for it, then using it as collateral to run up still further debt. What an ass. Barrack’s apparent duplicity has done the impossible … made checkered PokerStars appear to be the aggrieved, victimized party, just as it looked like Rational’s chances for regulatory approval were slip-slidin’ away.
Meanwhile, the rest of the Boardwalk is reeling in disbelief at the all-time-low sales price. Having gotten in on the action for a mere pittance, Rational is understandably disinclined to take Colony’s rejection and just walk away. Although it’s merely a hypothesis, if indeed Carl Icahn had chased the Meruelo Group away from Trump Taj Mahal, as The Press of Atlantic City reports, possibly Colony saw the chance to pick up $20 million for the Atlantic Club and engineer a divorce with PokerStars. Coincidentally, Colony is demanding $21 million from Rational: $11 million in monies already paid, $4 million for the privilege of being told to go to Hell, plus another $6 million to extend the seemingly fruitless — and now deeply poisoned — negotiations.
Under the astute leadership of Barrack and gambling czar Nick Ribis, the ACH generated $39 million in losses over the last two full years. If Rational is correct about unfunded pension liabilities and weekly operating losses, Colony is playing Russian roulette by terminating the PokerStars deal. Yeah, there are guys like Tilman Fertitta who generously overpay for distressed casinos, but they’re few and far between, and none are on the horizon, especially with this cloud of litigation hovering over the ex-Hilton. Maybe Ribis and Barrack have some sneaky master plan up their tailored sleeves. But what used to be Steve Wynn‘s Golden Nugget now looks like it’s facing another near-death experience.