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Former State Fair president says creditors should have negotiated a deal to avoid the bankruptcy auction
Date published: 5/31/2012
Billy Beale, chairman of the State Fair's board of directors, wished Universal Fairs success in its effort to create a diversified event emphasizing Virginia's agricultural industry.
"I would like to congratulate Universal Fairs on their being able to purchase The Meadow Event Park and the intellectual property for less than SFVA offered to the lenders in March," Beale, who is also chief executive officer of Union First Market Bankshares Corp., said on the day of the auction.
Beale's reference was to a $5.5 million offer from an unnamed Richmond-based real-estate developer that creditors rejected. The developer planned to lease the property back to the State Fair organization.
The creditors' rejection forced fair officials to convert the Chapter 11 bankruptcy reorganization filing into a Chapter 7 liquidation.
Christy Myatt, an attorney for Nexsen Pruet, who is representing a lender group headed by ArborOne Farm Credit of South Carolina, said higher offers were rejected because it would have taken more time to get the money. Myatt said the creditors will take a "huge loss," and that the specific amount will not be known until August or September.
She did say that $345,000 in scholarships will be awarded to students who have not yet received them.
"They are under no obligation to fund those, but the creditors decided to," she said last week.
Roberts said if creditors had accepted the developer's plan, there would have been no need for an auction, no question as to what kind of fair would be offered in the future and no doubts about the student scholarships being paid. And because the offer was rejected, about 20 full-time fair employees lost their jobs, he said.
"The bottom line is if [the creditors] negotiated in good faith in November, we could have worked this out and they probably would have [netted] more money than they are getting now," Roberts said.
"I'm not sour or bitter. I'm more bewildered by the decisions that seemingly intelligent people made. They chose to do it this way, and these were the results."
Portsia Smith: 540/374-5419