Tuesday, Feb. 17, 2009

Judge approves sale of Hard Rock Park for $25 million

Wilmington, Del. | A judge has approved the sale of Hard Rock Park to FPI MB Entertainment for $25 million. The sale is scheduled to close no later than 5 p.m. Thursday, but could happen as early as Wednesday.

Delaware bankruptcy court Judge Kevin Carey called the price adequate and the process rigorous. "Anyone who wanted the opportunity to bid had it," he said. FPI wants to keep the Hard Rock brand but has agreed to destroy any Hard Rock-branded merchandise before the park opens if there is no agreement on extending the license agreement, lawyers for the companies said in court.

The judge overruled the objection of Coastal Entertainment, a company out of Finland that said it wanted to bid $25.5 million. Officials with legal and accounting firms involved in the case it would take at least 10 to 14 days for the company's funding to come through to the United States, and they could not confirm a claim by the company that it had wired in a down payment of $2.5 million.

Carey said Coastal Entertainment came "to the court too little and too late." A lawyer for Coastal Entertainment, Karen Bifferato, said she believed her client's bid, given time, would have been the better offer.

FPI has said it wants to reopen the park by Memorial Day. It would take about three months to get it ready, including adding rides, arranging merchandising and designing new attractions and shows, the company has said in court documents.

"We're absolutely thrilled with the bankruptcy court's decision today, and we look forward to opening the park in the May timeframe," said David Wasson, a principal with FPI MB Entertainment. He would not say what was in store for season ticket holders and referred all other questions to Brandon Advertising, a Myrtle Beach company working with FPI.

Hard Rock International has already removed some memorabilia from the park - but not all the memorabilia it expected to find, said Richard Robinson, a lawyer for the cafe company. Robinson said he didn't know whether it was because the company's list of memorabilia was wrong or whether some of it had been stolen.

FPI had wrestled Coastal Entertainment in court over their competing bids. FPI said Coastal's offer was only better on the surface - and that it would not cover $2 million in taxes, administrative expenses and other contracts that were included in FPI's bid.

Most of the money - more than $20 million - will go toward covering several debts to Deutsche Bank, with some money left over for lawyers and administrators. Between $300,000 and $400,000 will be left to be divided among bondholders, who are owed about $255 million, said John Carroll, the trustee's attorney.

Anyone else who had been interested in buying the park is out of luck, trustee Fred Giuliano said. A local water park owner and former Horry County Councilman, Mark Lazarus, had said he was interested in purchasing the 55-acre amusement that sits on 140 acres of land.

During the hearing, the judge took Coastal Entertainment to task for the timing of its bid.

"I want to find out, where have you been?" Carey asked Bifferato. "This has been a sale case since last fall, maybe earlier than that. ... Are you telling me your clients just found out this park was for sale?"

He also asked what the people behind Coastal Entertainment do for a living, but Bifferato said she was not sure what she was at liberty to disclose.

Hard Rock Park, which licensed the brand name from the cafe and casino company, opened in April and closed and filed for bankruptcy in September. It said it employed 2,000 people at its peak.

Employees were sent W-2 forms in the mail two weeks ago, Giuliano said.

Earlier today:

2:30 p.m. - A judge has approved the sale of Hard Rock Park to FPI MB Entertainment for $25 million. The sale is scheduled to close no later than 5 p.m. Thursday.

Judge Kevin Carey called the price adequate and the process rigorous.

"Anyone who wanted the opportunity to bid had it," he said.

He overruled the objection of Coastal Entertainment, which objected to the sale of the park to FPI and bid $25.5 million. He said the company "comes to the court too little and too late."

A lawyer for Coastal Entertainment, Karen Bifferato, said she believed her client's bid, given time, would have been the better offer.

2:25 p.m. - Trustee Alfred Giuliano, on the stand, said the sale to FPI would more than likely happen Wednesday.

2:10 p.m. - A lawyer representing Hard Rock International said FPI had agreed to destroy any Hard Rock-branded merchandise before the park opens if there is no agreement on extending the license agreement.

That would mean that any souvenirs that are out there now are the only ones that might ever be out there.

Hard Rock International has already removed some memorabilia from the park - but not all the memorabilia it expected to find, a lawyer for the cafe company said.

He said he didn't know whether it was because the company's list of memorabilia was wrong or whether some of it had been stolen.

1:12 p.m. - The judge called a recess to allow FPI and Hard Rock to discuss whether they can resolve issues related to the brand contract. FPI wants to use the brand on the park if Hard Rock agrees.

The judge has not yet ruled on Coastal's request for an auction. It would take Coastal 10 days to two weeks to line up the financing.

``Frankly, we don't believe it warrants conducting an auction under these circumstances,'' said John Carroll, an attorney for the trustee.

1:05 p.m. - The trustee handling the bankruptcy case for Hard Rock Park says he doesn't want an auction. The trustee's lawyer said he could not get confirmation of Coastal Entertainment's down payment, plus it would take 10 days to two weeks to fund the deal.

10:45 a.m. - The hearing has adjourned until 1 p.m. Officials are learning more about Coastal Entertainment's bid and working out details of whether an auction will be held.

Representatives of and Coastal Entertainment were at the hearing. Another group that said it was interested in buying the park _ led by local water park owner Mark Lazarus _ wasn't mentioned this morning.

The trustee for the park had said in court documents a week ago that FPI had the best offer, but an auction could be held if more suitable bids came in.

10:26 a.m. - FPI MB Entertainment, which has offered $25 million for the park, wants to keep the Hard Rock brand if the company agrees

10:22 a.m. - Coastal Entertainment LLC is offering $25.5 million, all cash, and will not use the Hard Rock brand. Coastal Entertainment LLC is from Finland.

10:10 a.m. - An attorney for Hard Rock International, which allowed the park to use the name for $2.5 million annually, said the company had been talking about wanting to debrand, but they had been denied access to debrand.

Jessica Foster contributed to this report.