Offer made to buy Arrow Dynamics
Bid for bankrupt company opposed by other creditors
Bankrupt roller-coaster maker Arrow Dynamics Inc. may be sold to one of its secured creditors for $2.25 million.
A joint offer by Hong Kong businessman James T. King, also a shareholder in the company, and Florida businessman Conrad R. Wagner was selected as an opening bid at an auction to be held June 13.
The $2.25 million bid is comprised of cash in the amount of $384,479 and a credit bid in the amount of $1.87 million, part of King's undisputed secured claim against Arrow.
If their bid is successful, the partners intend to form a new corporation and provide Fred Bolingbroke, current president of Clearfield-based Arrow, with 25 percent interest in the company.
King's and Wagner's bid meets the minimum bid requirement set by the court at $2.25 million for all assets.
However, the bid is opposed by the unsecured creditors' committee, comprised of 20 of the largest unsecured claims against the company. Those claims amount to roughly $3 million.
"The unsecured creditors' committee has indicated that none of the bids that were submitted were acceptable," said R. David Grant, an attorney representing Arrow Dynamics. "If we don't have improvement in those bids, it appears the unsecured creditors' committee will object to the sale."
A separate bid by Six Flags Theme Parks Inc. for $10,000 cash also was submitted. That bid includes an agreement to discharge $5.9 million of its claims against Arrow.
Salt Lake attorney David E. Leta, who represents Six Flags, said it is debatable whether King's bid is the highest or best bid.
"You have to look at what the cash component is versus what the non-cash components are of the bids to try to figure out which bid is actually going to be most advantageous," Leta said.
Should no improvements in the existing bids be met, the sale of Arrow may not occur.
"I believe that the judge will give the views of the unsecured creditors' committee significant weight," Grant said.
Arrow Dynamics filed for Chapter 11 bankruptcy protection in December after losing millions of dollars in building a roller coaster for Six Flags Magic Mountain, an amusement park near Los Angeles.