The Fontainebleau Resort in Miami, where the National Association of Television Programming Executives was planning to hold its conference in January 2022, is claiming NATPE owes it $3.4 million and is opposing NATPE’s plans to auction off the bankrupt trade group’s assets.
The Fontainebleau on Monday filed papers with the U.S. Bankruptcy Court for the central district of California.
NATPE in October filed for bankruptcy court protection, claiming that the cancellation of events because of COVID-19 left its finances in shambles. Last week, NATPE asked the court to approve a plan to auction off NATPE’s assets before the end of the year.
NATPE said Toronto-based Brunico Communications was the top bidder for the assets, offering $150,000 plus the assumption of liabilities. In the auction, Brunico would be the “stalking horse” bidder, whose offer others interested in the assets would have to top.
In its filing, the Fontainebleau called itself “the largest creditor in the case” with an unsecured claim of no less than $3,414,618.69. Previous filings by NATPE had not cited debt owed to the Miami resort, where NATPE had held its January conference and marketplace for more than a decade.
Fontainebleau said the proceeding thus far was “characterized by excessive compensation and insider dealing” and said that decisions regarding NATPE’s assets should require “transparency and due deliberation.”
The Fontainebleau was critical of NATPE’s actions.
“The Debtor has apparently run some kind of a sale process on its own, selecting a stalking horse offer that is plan dispositive. The stalking horse offer provides for 90% of the purchase price to consist of the assumption of certain customer obligations, resulting in one group of creditors getting paid 100% with other similarly situated creditors getting paid just pennies on the dollar,” the hotel said in its filing. “Disclosures about the sale process and the Debtor’s operations are inadequate, and this Court should require the Debtor to slow down and run a transparent sale process designed to maximize the return to general unsecured creditors.”
The Fontainebleau is asking that NATPE provide it with copies of all of the offers it has received; for disclosure about any relationships between NATPE and the bidders; that bids should be entirely in cash and that a trustee should work with the hotel to evaluate bids and procedures, including the determination of the winning bid.
In his declaration with its bankruptcy court filings, former NATPE CEO JP Bommel, now identified as the group’s interim CEO, said that “prior to its bankruptcy filing, [NATPE’s] operations were dramatically affected by the unavoidable cancellation of an event due to COVID, which resulted in a lengthy and drawn-out arbitration with its hospitality vendor hosting the event. In summary, the vendor is demanding payment of a cancellation fee, and Debtor opposes the fee due to a Force Majeure clause in the agreement. The arbitration was pending when the petition was filed.”
After it filed for bankruptcy protection, NATPE laid off several of its staffers. C21, a U.K. publishing company quickly issued a letter of intent saying it was interested in acquiring NATPE’s assets.
Last month, NATPE formally said that its initially planned January conference in the Bahamas was canceled. ▪️
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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