Opinion ID: 3006049
Heading Depth: 2
Heading Rank: 3

Heading: Revel Responds to IDEA at the 11th Hour

Text: Late on the Friday night just three days before the January 5, 2015 sale hearing, Revel filed an “Omnibus Reply” to IDEA’s objections. Regarding the latter’s § 365(h) argument, Revel urged the Court to follow the Seventh Circuit’s decision in Precision Indus., Inc. v. Qualitech Steel SBQ, LLC, 327 F.3d 537 (7th Cir. 2003), which held that 8 § 365(h) doesn’t disable § 363(f)’s authority to sell property subject to a lease free and clear of that lease and instead triggers only when a debtor seeks to reject a lease under § 365. Id. at 548. Revel also asserted that it could satisfy one of § 363(f)’s five conditions—namely, § 363(f)(4)—because a bona fide dispute exists with respect to the validity of IDEA’s lease. According to Revel, though the form of its agreement with IDEA gives the appearance of a lease, because rent was “based entirely on a percentage of the revenue derived from” IDEA’s operations, it was not a “true lease[] entitled to benefit from the applicable protections set forth in the Bankruptcy Code.” Debtors’ Omnibus Reply ¶ 20, In re Revel AC, Inc., No. 14-22654 (Bankr. D.N.J. Jan. 2, 2015), ECF No. 1109.