NJMP bankruptcy update - Rennlist - Porsche Discussion Forums

Notices
Racing & Drivers Education Forum
Sponsored by:
Sponsored by:

NJMP bankruptcy update

 
Old 05-24-2011, 03:09 PM
  #1  
Phokaioglaukos
Addict
Rennlist Member
Thread Starter
 
Phokaioglaukos's Avatar
 
Join Date: Oct 2004
Location: Blackrock, Co Dublin, Ireland
Posts: 3,278
Default NJMP bankruptcy update

Dear Driver’s Club Members,

We are excited to begin our exit from our bankruptcy proceedings! We anticipate that the court will approve our Plan of Reorganization on July 14th, which is well ahead of the originally projected date. To detail our progress, there will be a press statement going out this afternoon from our Financial Advisors, The Brownstein Corporation, explaining an Investment Opportunity which is part of our pre-packaged re-organizational plan.

NJMP made the decision to reorganize in order to restructure its balance sheet. It had taken on too much debt, and like many businesses dealing with the events of 2008-2010, our original forecasts proved to be too optimistic. So, like many businesses in our situation, we are utilizing a bankruptcy proceeding to restructure our debts and equity. Fortunately, our secured lender, Merrill Lynch Mortgage Capital, Inc., is co-sponsoring our Plan of Reorganization, and we anticipate emerging from the bankruptcy process within several weeks with reduced debts, stronger than ever. In the meantime, we are managing our business as usual, and making exciting plans for the future which we’ll announce after our Plan has been confirmed. The bankruptcy process has had and will have no effect upon our 2011 scheduled racing events or other social events. Drivers Club Memberships, season passes, pre-event ticket sales, VIP suite and Villa rentals, track rentals and all other NJMP operations have not been affected, and we expect business to be conducted as usual throughout the remainder of the bankruptcy process and after we exit within the next several weeks.

If you have any questions regarding the press statement or investment opportunity please call or email Angela Phillips at (302) 521-5194 or [email protected]. Any NJMP operating questions may be directed to Brad Scott, General Manager of NJMP at [email protected]

We look forward toward moving into the future and appreciate all your support during these recent proceedings.

Thanks.

Joe Volpe
Director of Motorsports Activities
New Jersey Motorsports Park
47 Warbird Drive
Millville, NJ 08332
856-327-7225
856-327-8835 Fax
[email protected]
Phokaioglaukos is offline  
Old 05-24-2011, 03:16 PM
  #2  
DM993tt
Addict
Rennlist Member
 
DM993tt's Avatar
 
Join Date: May 2006
Posts: 1,428
Default

Seems like a lot of words without saying much.
DM993tt is offline  
Old 05-24-2011, 03:21 PM
  #3  
cello
User
 
cello's Avatar
 
Join Date: Jul 2007
Location: Southern NJ & Coast
Posts: 1,834
Default

From here: http://www.thedailyjournal.com/artic...524003/MILLVIL

...........

MILLVILLE: Motorsports park expects to leave bankruptcy behind in July

New Jersey Motor Sports LLC said this afternoon it has proposed a definite plan to emerge from bankruptcy following a July 14 hearing in U.S. Bankruptcy Court in Camden.

At that hearing, the park said, it expects the court to confirm its Plan of Reorganization. “This will mark the end of a remarkably quick restructuring process, whereby NJMP filed Chapter 11 bankruptcy on March 7th with an agreement with its secured lender, Merrill Lynch Mortgage Capital Inc.,” the park said in a statement.

As part of the plan, Merrill Lynch is reducing its secured debt from $30.4 million to $20 million. Merrill Lynch also will act as co-sponsor of the reorganization plan along with NEI Motorsports LLC. NEI 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,” the park stated. “NEI’s shareholders include some of NJMP’s shareholders.”

NEI’s and Merrill Lynch’s proposal is subject to “higher and better cash offers” — with a minimum of $23 million.

Brownstein Corporation, NJMP’s court-approved financial advisor, will send solicitations via email and mail to determine whether there are interested parties with better terms. There are specific bidding procedures to which any interested parties must adhere.

“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 stated.

........
cello is offline  
Old 05-25-2011, 10:21 AM
  #4  
jonmacs22
User
 
Join Date: Nov 2010
Posts: 46
Default

Seems like someone could put together a bidding group for $24mm pretty easily and have a shot at a takeover. Would not be difficult to raise $8mm in equity, $16mm in debt, and take it over.
jonmacs22 is offline  
Old 05-25-2011, 10:36 AM
  #5  
ProCoach
Rennlist Member
Rennlist
Small Business Partner

 
ProCoach's Avatar
 
Join Date: Jun 2008
Location: Durham, NC and Virginia International Raceway
Posts: 11,947
Default

Originally Posted by jonmacs22 View Post
Seems like someone could put together a bidding group for $24mm pretty easily and have a shot at a takeover. Would not be difficult to raise $8mm in equity, $16mm in debt, and take it over.
And the return?
__________________
-Peter Krause
www.peterkrause.net
"Combining the Art and Science of Driving Fast!"
Professional, Private Driver Performance Analysis
Authorized Sales and Support for AiM Sports, VBOX Video, MoTeC, AutoSport Labs, RaceVoice LLC, Apex Pro and Cosworth Electronics
ProCoach is online now  
Old 05-25-2011, 10:56 AM
  #6  
Potomac-Greg
Super User
 
Potomac-Greg's Avatar
 
Join Date: Jan 2008
Location: Suburban DC
Posts: 2,641
Default

I wonder how much the real estate (villas) plays into this. I assume sales sucked, but was that a big drag on the financial performance. As far as I could tell, they had the track as booked up as you could expect, and they had a good promo team attracting pro races.
Potomac-Greg is offline  
Old 05-25-2011, 11:05 AM
  #7  
Professor Helmüt Tester
User
 
Join Date: May 2003
Location: Crash Platz
Posts: 1,129
Default

Originally Posted by Lolaman View Post
And the return?
A decade of heartburn ?
Professor Helmüt Tester is offline  
Old 05-25-2011, 11:22 AM
  #8  
drdrank
User
 
drdrank's Avatar
 
Join Date: Nov 2010
Location: USA
Posts: 422
Default

Originally Posted by Potomac-Greg View Post
I wonder how much the real estate (villas) plays into this. I assume sales sucked, but was that a big drag on the financial performance. As far as I could tell, they had the track as booked up as you could expect, and they had a good promo team attracting pro races.
The fancy stuff (villas) could have been how they were projecting to get a return. I assume that's pretty high margin for them over time.
drdrank is offline  
Old 05-25-2011, 11:33 AM
  #9  
kush07
User
 
kush07's Avatar
 
Join Date: Jul 2006
Location: New York
Posts: 289
Default

Originally Posted by Potomac-Greg View Post
I wonder how much the real estate (villas) plays into this. I assume sales sucked, but was that a big drag on the financial performance. As far as I could tell, they had the track as booked up as you could expect, and they had a good promo team attracting pro races.
I heard just the opposite. No industry contacts, no real push. An "if you build it they will come" marketing plan.

Out of 62 possible May bookings (2 tracks x 31 days) I heard they had 16-18. Gonna be tough covering your nut at that rate.

This is just what I've heard from people closer to the situation than me, but I have no idea how accurate it may/may not be.

Still, that's a lot of debt forgiveness and should make it much easier for them to be profitable and therefore around for a long time.
kush07 is offline  
Old 05-25-2011, 01:42 PM
  #10  
jonmacs22
User
 
Join Date: Nov 2010
Posts: 46
Default

Originally Posted by Lolaman View Post
And the return?
The return is there, it may be at exit, but it is there.

I am a firm believer that the barriers to entry for building tracks are only going to continue to increase.

NJMP may need to consider dropping some of the pro races where they have to pay and focus more on paying customers.
jonmacs22 is offline  
Old 05-25-2011, 01:53 PM
  #11  
gums
Addict
Rennlist Member
 
gums's Avatar
 
Join Date: Aug 2001
Location: New York, NY
Posts: 4,456
Default

Whatever is going on, it looks favorable to me (what does a dentist know about business?).
But more importantly, something has happened in the last 5 or so years that there have been more new track constructions since the sport first went off public roads in the 50's.
gums is offline  
Old 05-25-2011, 01:55 PM
  #12  
Circuit Motorsports
Addict
Rennlist Member

Rennlist Small
Business Sponsor

 
Circuit Motorsports's Avatar
 
Join Date: Oct 2007
Location: Durham, NC
Posts: 3,156
Default

Originally Posted by kush07 View Post
I heard just the opposite. No industry contacts, no real push. An "if you build it they will come" marketing plan.

Out of 62 possible May bookings (2 tracks x 31 days) I heard they had 16-18. Gonna be tough covering your nut at that rate.

This is just what I've heard from people closer to the situation than me, but I have no idea how accurate it may/may not be.

Still, that's a lot of debt forgiveness and should make it much easier for them to be profitable and therefore around for a long time.
Just looked at their calendar. Looks like there are 17 days that aren't booked between the 62 possible May bookings. Not as full as VIR is for the same month but nearly 75% usage rate. Not sure what the magic number to cover the nut is but it has to be in that neighborhood.

Originally Posted by jonmacs22 View Post
The return is there, it may be at exit, but it is there.

I am a firm believer that the barriers to entry for building tracks are only going to continue to increase.

NJMP may need to consider dropping some of the pro races where they have to pay and focus more on paying customers.
The number of pro races on the books are a drop in the bucket for total days of use. Most of their 'spectator' calendar is filled with groups that do pay for the track.
Circuit Motorsports is offline  
Old 05-25-2011, 02:01 PM
  #13  
ProCoach
Rennlist Member
Rennlist
Small Business Partner

 
ProCoach's Avatar
 
Join Date: Jun 2008
Location: Durham, NC and Virginia International Raceway
Posts: 11,947
Default

Originally Posted by jonmacs22 View Post
I am a firm believer that the barriers to entry for building tracks are only going to continue to increase.
Having been involved with the planning and construction of CMP, VIR and TBolt, this is very true.

Having heard of and seen the failures of Rausch Creek, the Poconos track, Dragon's Ridge, the Savannah course, High Rock and others and knowing the economics of operating these venues, it's a hard row to hoe...
__________________
-Peter Krause
www.peterkrause.net
"Combining the Art and Science of Driving Fast!"
Professional, Private Driver Performance Analysis
Authorized Sales and Support for AiM Sports, VBOX Video, MoTeC, AutoSport Labs, RaceVoice LLC, Apex Pro and Cosworth Electronics
ProCoach is online now  
Old 05-25-2011, 03:18 PM
  #14  
Potomac-Greg
Super User
 
Potomac-Greg's Avatar
 
Join Date: Jan 2008
Location: Suburban DC
Posts: 2,641
Default

Originally Posted by Lolaman View Post
Having been involved with the planning and construction of CMP, VIR and TBolt, this is very true.

Having heard of and seen the failures of Rausch Creek, the Poconos track, Dragon's Ridge, the Savannah course, High Rock and others and knowing the economics of operating these venues, it's a hard row to hoe...
Not to mention the tracks that have disappeared over the decades, and tracks that have died and come back to life (VIR). Personally, I would pay 25% more for track costs if that keeps my hobby alive.

So, what characteristics do the "successful" tracks share?
Potomac-Greg is offline  
Old 05-25-2011, 04:01 PM
  #15  
kush07
User
 
kush07's Avatar
 
Join Date: Jul 2006
Location: New York
Posts: 289
Default

Originally Posted by Circuit Motorsports View Post
Just looked at their calendar. Looks like there are 17 days that aren't booked between the 62 possible May bookings. Not as full as VIR is for the same month but nearly 75% usage rate. Not sure what the magic number to cover the nut is but it has to be in that neighborhood.
That's great to hear. I thought the figure I was told sounded really low, but I didn't know any figures. If they keep up with 75% and a reduced debt load you've got to figure they should be on firm footing.

The lost villa sales must have been the killer. I heard (again, I'm no insider) that they were planning on 150, had deposits on 50 or so, and ended up with 8. Selling 150 villas would have paid down a huge portion of their debt which would have left them with great margins. Sounds more like a spec real estate development play (remember, market was sizzling at the time) with a track attached, than the other way around.

No matter. As long as they're around, I'm happy.
kush07 is offline  

Thread Tools
Search this Thread
Quick Reply: NJMP bankruptcy update


Contact Us About Us Advertising Cookie Policy Privacy Statement Terms of Service

© 2019 MH Sub I, LLC dba Internet Brands

We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.
 
  • Ask a Question
    Get answers from community experts
Question Title:
Description:
Your question will be posted in: