Friday, August 23, 2019

Pierce fronts $200,000 to keep arena open

By Miles Maguire

The owner of the Menominee Nation Arena has won court approval to kick in $200,000 to keep the facility operating in the short term.

“We are putting our own money on the line to make this work,” said Greg Pierce, the president of Fox Valley Pro Basketball Inc., which built and now operates the arena. He is also the president of a local investment advisory firm, Windward Wealth Strategies Inc., which will provide the short-term loan.

Fox Valley filed for Chapter 11 bankruptcy protection on Monday in a successful effort to head off an effort by the general contractor on the project, Bayland Buildings Inc., to force the arena into receivership.

The loan plan that was approved by U.S. Bankruptcy Judge Brett H. Ludwig Friday was significantly scaled back from Fox Valley’s original proposal after objections were raised by the U.S. bankruptcy trustee, Michele Kramer. A bankruptcy trustee is a lawyer who is appointed to look out for the best interests of the entity that has sought legal protection to try to maximize value for creditors.

An attorney for Future Bucks LLC, the owner of the Wisconsin Herd, also expressed some reservations.

The parties will return to court next month to hash out details. The judge has set aside time over two days in case the discussion turns into “a dogfight,” in his words.

The arena has identified secured and unsecured debts of more than $20 million. Legal filings and public statements point to the tensions between Fox Valley and its creditors, primarily Bayland, which has the largest loan outstanding.

Bayland received only about $9.6 million in construction payments on the $21 million arena. It holds a mortgage on the property and has received $2.2 million in interest, according to court papers.

In one document Pierce says he was “surprised” to learn about Bayland’s receivership filing, saying the news came to him from a reporter. In a press release the his company said it “was close to securing full financing to satisfy the claims of all creditors” when Bayland went to court.

Pierce also pointed out that in February Bayland “called a default and asserted a default interest rate of 24%, double the original 12% rate. That raised interest alone to $250,000 per month.”

The emergency loan will be used to make payroll, to pay for supplies and to cover other costs.

An attorney for Fox Valley put an optimistic spin on the situation. “We believe that the company should be able to exit Chapter 11 within a relatively short time and expect the principal amounts due to all creditors to be paid in full,” said Jerome Kerkman, a lawyer at Kerkman & Dunn. “This will be a superior result than what creditors can expect in a receivership.”

No comments:

Post a Comment