Developer hoping for Geneva bid

A Sandy-based developer is hoping to be officially recognized by a bankruptcy court as a qualified backup bid for Geneva Steel's 1,700 acres.

On Friday, Anderson Development LLC agreed to drop its objections to proposed bid procedures that would establish rules for auctioning Geneva's land in Vineyard and offered to put down $5 million in non-refundable earnest money.

In return, Anderson Development wants to be recognized as a backup bid and be guaranteed a position at a November auction for Geneva's property.

Anderson Development had previously offered $32.6 million for Geneva's property, hoping to be named by the court as a so-called "stalking horse" bidder. That designation would allow the company to recoup $945,000 in its due-diligence costs if Anderson Development is outbid at auction.

However, a subsequent $44.5 million offer for Geneva's property by Utah Lake LLC, an entity of Prudential Real Estate Investors, eclipsed the Anderson bid, positioning Utah Lake's as the stalking horse bid and raising objections by creditors and Anderson Development.

James T. Markus, Chapter 11 trustee for Geneva Steel, said by recognizing Anderson Development as a backup bid, the estate will be protected should Utah Lake's bid not materialize.

If the court approves Utah Lake as the stalking horse bidder, it would be entitled to a breakup fee of $1.3 million if it is outbid at auction.

Anderson Development also would qualify for a breakup fee if the new bid procedures are approved.

Once the procedures are approved, the trustee will solicit additional bids for Geneva's property through a sealed bid process. A hearing is set for Monday.

"We're satisfied with the resolution," said Michael Hutchings, an attorney for Anderson Development LLC. "I think this is truly a win-win for everybody.

Anderson Development already owns 320 acres of property adjacent to the Vineyard-based mill.

Qualified sealed bids must be at least $46.3 million and include a $5 million earnest money deposit. If the new procedures are approved, Utah Lake and Anderson would advance to the auction as well as the two highest sealed bids.

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