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DATE News (chronologically)
05/24/11
track news
NJ track goes belly-up, emerges from bankruptcy  UPDATE #2
NJ Motorsports Park
New Jersey Motor Sports, LLC (“NJMP”), one of the east coast’s premier operators of motorsports activities, is pleased to announce that it has proposed a definite plan to emerge from bankruptcy, following a court hearing scheduled for July 14th in Camden, NJ. At that time, NJMP’s Plan of Reorganization (“Plan”) is expected to be confirmed by the U.S. Bankruptcy Court. This will mark the end of a remarkably quick restructuring process, whereby NJMP filed Ch. 11 bankruptcy on March 7th with an agreement with its secured lender, Merrill Lynch Mortgage Capital, Inc.

Pursuant to the Plan, Merrill Lynch is reducing its secured debt from $30.4 to $20 million, and will act as co-sponsor of the Plan, along with NEI Motorsports, LLC (“NEI”), who will pay $2,000,000 to fund certain obligations pursuant to the Plan. In the event this stalking horse $22,500,000 transaction is determined to be the highest and best, NEI will be a majority owner of NJMP upon bankruptcy emergence and Merrill Lynch will hold a minority interest, along with its $20,000,000 restructured secured loan. NEI’s shareholders include some of NJMP’s shareholders.

As with all transactions that seek a bankruptcy court’s approval, NEI’s and Merrill Lynch’s proposal is subject to higher and better cash offers with a minimum of $23 million. As such, Brownstein Corporation, NJMP’s court-approved Financial Advisor, will be sending out solicitations via email and mail to determine whether there might be potentially interested parties with better terms than the “Stalking Horse bid” that NEI and Merrill Lynch are offering. There are specific bidding procedures to which any other potentially interested parties must adhere, which are available from NJMP or Brownstein Corporation.

Importantly, the Plan will not affect the longstanding and valuable relationships NJMP has established with its members, patrons and sponsors, nor will there be any material changes in the company’s operations, including its scheduled events, the Drivers Club, Shade Tree Garages, Breighton Villas, hospitality suites, sponsorships, or other aspects of its operations.
NJMP is looking forward to successfully completing its restructuring in the coming weeks, and resuming its growth plans for serving the east coast motorsports community.

03/14/11 New Jersey Motorsports Park last week announced it had filed for Chapter 11 Bankruptcy, a move that caused some in the local and racing communities to question the facility's future viability.  Today, NJMP released further details on its financial restructuring, and sought to clarify the circumstances and expected results of its recent actions.

Management and Ownership Changes

One of the ramifications of the recent filing is a future change to the ownership structure planned to coincide with the effective date of plan confirmation and reorganization. Lee Brahin, the Philadelphia-area real estate developer who led and oversaw the development of the entire facility, will increase his ownership stake, and will become co-managing partner of NJMP. Harvey Siegel, who has employed his expertise in running multi-use motorsports facilities such as his Virginia International Raceway to great effect at NJMP, will retain his ownership stake and will continue to work on future development concepts and activities while fostering relationships within the racing community for the Park's benefit. Former minority owner RJ Valentine will up his stake to a more significant holding, becoming co-managing partner with Brahin and assuming managerial responsibility for marketing activities at the Park.

NJMP has worked with its lender to restructure the terms of its financing agreement, providing a reduced principal balance and lower debt service - the net effect of which is that the facility will have more cash on hand for operations. 

Lee Brahin, who to date has been instrumental in creating the vision for the park, master-planning and execution of permitting processes and construction, will continue to work on development activities, entitlements and high level financial and business activities of the enterprise.

He said, "We have worked in cooperation with our lender and have come up with a structure that we feel will maximize long-term value to all of the various stakeholders in the business while providing continued and expanded world-class service to our customers, Within that structure and plan, we appreciate their strong confidence in existing management. I look forward to my continued involvement in existing management during our reorganization process as well as being involved in the future management team which will feature an array of new and successful entrepreneurs with an history of success and involvement in both the automotive and racing worlds. Truly, this will be the "A" team."

Brahin continued, "We've made what I think very many of our fellow Millville and Cumberland County businesses would call a significantly positive economic impact in the region, and will continue to build partnerships around South Jersey.  The more events we hold, the more of our spectators' and participants' dollars are spent in Cumberland County, and we will strive to be ideal 'anchor tenants' for the region, as we'd say in the retail development business."

Motorsports and Entrepreneurial Expertise

RJ Valentine has a long history of entrepreneurship and vast experience in the motorsports facilities business, including running two racing businesses that have weathered the financial storm of 2009-10, F1 Boston and F1 Outdoor.  In a career that has spanned more than 30 years, Valentine's marketing focused-ventures have included a network of highly profitable Jiffy Lube franchises, a Massachusetts-wide insurance operation, and extensive management roles in aviation, transportation and oil and gas companies. 

"While bankruptcy is always an unpleasant experience," Valentine commented, "it is a tool for businesses to use in restructuring its debt.  Our mortgage lender has been fantastic in working with us to restructure the debt that NJMP assumed to get our facility built and operating.  Like our lender, I have full confidence in my partners' - Lee Brahin and Harvey Siegel - abilities, leadership and vision. We are now strongly positioned to grow and increase our economic impact within the South Jersey community, and are excited to get into executing our marketing plans."

He said, "We've built an incredible management and operational team here, including our General Manager Brad Scott, who came to us with years of experience with Aramark, having overseen operations at the Wachovia Center in Philadelphia, Fenway Park in Boston and Camden Yards in Baltimore. Brad and his team have continued to build NJMP's event schedule and membership through two of the toughest years, economically, of the past couple of decades, and they deserve a great deal of credit for that."

03/07/11 New Jersey Motorsports Park (NJMP) announced a reorganization plan that includes the restructuring of debt, addition of new equity, and the filing of Chapter 11today, in a move that management feels confident will secure the Park’s future operations. NJMP has additionally agreed to terms with its primary lender that will enable it to restructure its debt through the bankruptcy filing. NJMP Owner and Managing Partner Lee Brahin stated “Although the decision to file Chapter 11 was a very difficult one, it was deemed necessary to protect future operations and to allow the Park to continue providing employment and other economic support to the local and regional communities.”

“Our overall plan for the future is still sound,” he continued. “Our renegotiated debt financing will enable us to move forward with our existing operational plan, although we will continue to reduce operating expenses and are in the process of renegotiating debt with vendors. We are also receiving an infusion of new equity from certain investors, which will bolster NJMP’s liquidity position.”

NJMP General Manager Brad Scott stated that the realignment of debt will not affect employment numbers, chiefly because needed reductions have already occurred. “We wish to emphasize that none of these changes will affect our scheduled 2011 racing and social events, Drivers Club Memberships, season passes, pre-event ticket sales, gift certificates, deposits or any other NJMP operation,” reported Scott.

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