Geneva-bid objection is dropped

Geneva Steel's unsecured creditors committee has withdrawn an objection it raised over bid procedures surrounding the sale of the defunct steel mill's 1,700 acres.

On Friday, J. Thomas Beckett, an attorney for the committee, told a bankruptcy judge that its objection was initially raised after Geneva's trustee accepted a $44.5 million bid by an unknown entity.

In addition, Beckett said that the "mystery bidder" appeared to be getting a free look at Vineyard-based Geneva's property and its environmental issues without putting down any "hard" money.

Earlier this week, the bidder's identity was revealed as Brownfields Development LLC, an entity of Prudential Real Estate Investors.

Beckett said he welcomed Prudential's participation in the case and said that every party in the case was better off.

Prudential's high bid has it poised to be named the so-called "stalking horse" bidder, a designation that would allow Prudential to collect a $1.3 million fee should a higher bid ultimately be chosen over Prudential's.

Sandy-based Anderson Development LLC has made the next-highest offer for Geneva's property, at $32.6 million.

James T. Markus, Chapter 11 trustee for Geneva Steel, is asking the court to approve procedures that would establish a sealed bid process that would set a minimum bid of $46.3 million going forward.

Anderson Development has continued its objection to the proposed bid procedures, calling the Prudential bid "illusory" and "a poorer deal for the estate."

Markus said at least seven entities have expressed interest in buying the property, which is envisioned by some to become a mixed-use development that will include thousands of homes, as well as commercial establishments and light industry.

Markus said if Prudential is chosen as the stalking-horse bidder, a 90-day due diligence period will begin in which the company will conduct tests of the property and share the data with all qualified bidders.

Friday's hearing on the issue was continued to July 29.

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