Thursday, December 5, 2019

Oshkosh arena owner seeks to hire second financial adviser to raise new capital for debt restructuring

A monthly operating report shows the Menominee Nation Arena owner increased its cash holdings in October.
By Miles Maguire
The owner of the Menominee Nation Arena is moving to hire a second financial adviser to help it raise capital so that it can restructure its debts.

Attorneys for Fox Valley Pro Basketball Inc. have asked U.S. Bankruptcy Judge Brett H. Ludwig to approve the hiring of Young America Capital, of Mamaroneck, New York, as a financing broker.

YAC’s assignment would be to seek out private investors “for some or all of [Fox Valley’s] assets or securities.” The company would be paid $7,500 a month for four months, sums that would be credited against transaction fees that it could earn for finding stock or debt investors.

“If YAC is successful, the debtor will be able to provide more favorable terms to creditors in a plan of reorganization, which is in the best interest of the debtor and the creditors of the bankruptcy estate,” Evan P. Schmit, one of Fox Valley’s lawyers, said in a Nov. 20 filing.

YAC is an investment banker that focuses on new and midsized companies, particularly by promoting nontraditional assets. One of its areas of expertise is the legal cannabis business, according to its website.

In addition to finding lenders, YAC may also engage in other activities, such as looking for new customers who could generate revenues for the arena or even looking for a buyer of the property. In fact the possibility of an outright sale is mentioned several times in a letter of agreement from YAC to Greg Pierce, CEO of Fox Valley.

“In the event of a sale transaction, purchase price shall include the fair market value of all gross consideration paid to the company, its employees, directors and shareholders, and includes any debt assumed in connection with a transaction,” the letter states.

But Schmit downplayed the likelihood of a sale of the arena, saying that YAC’s main focus is to bring in major investments that would allow Fox Valley’s largest creditors to be paid off.

The arena owner has already received the go-ahead to hire a different financing broker to try to monetize the future stream of tax incentive payments that are due from the city.

“YAC can bring in a bigger, more comprehensive package that would be more beneficial to creditors,” Schmit said in an interview.

In a separate filing, Fox Valley provided a financial report on operations for October, showing a net loss of $200,000.

“If you look at it, I think it’s positive,” Schmit said. “The debtor received some sponsorship payments and event sales [revenue].”

Despite the loss the arena’s cash balance rose by about $200,000 during October.

“In general I would expect November to be even better based on the start of the Herd season,” Schmit said.

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