|11-04-2009, 09:30 AM||#1 (permalink)|
Join Date: Jun 2007
All that’s left of AFL on the block
All that’s left of AFL on the block
The AFL’s Philadelphia Soul had to fight to win 17 games and the right to hoist the Jim Foster ArenaBowl trophy in 2008. Now, anyone with a checkbook will likely be able to buy the championship hardware as part of a bankruptcy auction set for Nov. 25.
If the 60-pound silver trophy isn’t attractive enough, how about the authentic playing field from the Grand Rapids Rampage franchise? The field is listed as an asset of the shuttered league, which is now in Chapter 11 bankruptcy protection. The Northern District of Illinois U.S. Bankruptcy Court has appointed a trustee to sell the AFL’s assets.
As a result, the AFL’s intellectual property, including the name and logo for the league and all of its teams’ names and logos, is on the block along with myriad other items, such a 25 boxes of AFL equipment stashed in an O’Hare Airport storage facility, 40 boxes of AFL merchandise, and two flat-screen televisions still attached to a wall in the league’s Chicago office.
Like the looks of the trophy Jon
Bon Jovi is holding? It perhaps
could be yours.
It is unclear what the sale means for any future iteration of the league, or whether a buyer of the AFL assets will resurrect it. A group led by Jerry Kurz, a co-investor in the AFL, already has created arenafootbal1, a new startup indoor league based in Tulsa, Okla.
There is no minimum bid or value listed for the assets and all proceeds are earmarked for a wide-ranging list of AFL creditors, including Fifth Third Bank, the largest secured creditor, which is owed $7.7 million. Other nonsecured creditors include former rights holder NBC, which is owed $1.59 million. Former AFL Commissioner David Baker is owed $985,000.
Baker said he is “saddened and disappointed” by what has happened to the league, adding that in 2008, the AFL had a $1 million gate for the ArenaBowl, record expansion fees and record attendance. “I sincerely believed the league was never stronger,” he said.
Former TV rights holder and minority investor ESPN is owed $540,000 and the AFL Philadelphia Soul franchise, co-owned by Jon Bon Jovi, is due $219,250. Full disclosure: Street & Smith’s Sports Group, publisher of SportsBusiness Journal, is owed $6,250 as an unsecured creditor.
“The real value is in the intellectual property,” said Alex Moglia of Moglia Advisors, a Schaumburg, Ill.-based corporate restructuring firm that was appointed on Oct. 20 to serve as the trustee to sell the AFL’s assets. As for the Foster Trophy, it’s likely to be sold after Moglia determines that it is AFL property.
“We preliminarily conclude that the trophy is included,” said John Collen, a partner at Tressler, which is representing Moglia Associates.
The AFL successfully filed in late August to move from a forced Chapter 7 bankruptcy to Chapter 11 protection in late August, the latest twist in the league’s demise. Jim Renacci, owner of the Columbus Destroyers, is listed as acting chief executive officer of the AFL. He did not return calls for comment.
“A Chapter 11 takes the bankruptcy into a public forum and creates a fair and thorough sale process,” said Richard Lauter, an attorney in the Chicago office of the law firm Freeborn & Peters, which has been retained to represent the creditors committee made up of the largest unsecured creditors. “In any bankruptcy, the value of any asset is what someone is willing to pay for it. That’s the hallmark of the bankruptcy sales process.”
The deadline to submit a bid on the AFL is Nov. 20, with the auction set for Nov. 25. There is no requirement that a bid must include all assets listed. It is also possible that a “stalking horse” bid will already be filed by the auction date, a process that could drive up the value of the sale.
“In the sales process, you can have what is known as a stalking horse bid, and it is an initial bid that is out as the baseline for other bidders to exceed,” Lauter said.
All thatâ€™s left of AFL on the block
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