A bankrupt Arizona participant sports venue received no qualified bids by last week’s deadline, although other parties are interested in purchasing the venue as the financing to keep it operating nears its end.
A filing in U.S. Bankruptcy Court in Arizona late Tuesday on behalf of Legacy Cares, the venue’s owner, said no bids that met requirements for a qualified bid under procedures approved by Judge Daniel Collins in September were submitted by Thursday.
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Legacy Cares, which filed a Chapter 11 bankruptcy in May after defaulting on bonds, said it is attempting to improve or confirm submissions from several parties interested in purchasing Legacy Park so they meet the requirements for a qualified bid that “the debtor can put before the court.”
The filing added, Legacy Cares “believes it is still possible to bring such an offer to the court within the timeframe set by the existing (debtor-in-possession) budget.” The judge had approved up to $9 million in DIP financing to allow the sports venue to continue to operate. Last month, the DIP loan’s Sept. 30 maturity date was extended to Oct. 31.
Just days before the bidding deadline, the Official Committee of Unsecured Creditors filed a motion seeking to convert the case to a Chapter 7 liquidation, noting, “the sale process appears moribund,” while money from the DIP loan is dwindling.
The lack of bids is a setback for Legacy Cares, which sold $284 million of mostly tax-exempt, unrated revenue bonds in 2020 and 2021 through the Arizona Industrial Development Authority to build the 320-acre park on rented land in Mesa. The venue hosts youth and amateur competitions in sports including soccer, basketball, volleyball, and pickleball.
Bond trustee UMB Bank declared events of default last year because Legacy Cares failed to make scheduled monthly payments toward the revenue fund that supports debt service on the bonds.
A bond payment default occurred in January when only $2.68 million was available in the bond fund to make a $10.3 million interest payment.
In February, bondholders rejected a plan to refinance the debt and generate funds to settle claims from contractors and others.
Meanwhile, bondholders have been approached about pursuing claims related to the bonds’ sale as potential sources of payment.
Jon Schotz, a co-managing partner at Saybrook Fund Advisors, which acquired some Legacy Cares’ bonds after the bankruptcy filing, said litigation against professionals involved in the debt’s sale will be pursued promptly.
A spokeswoman for Ziegler, which served as underwriter for Legacy Cares bonds, did not respond to a request for comment.