The Chattanooga real estate developer who signed a purchase agreement for the Cleveland Speedway now says he is no longer interested in purchasing the property.
The U.S. bankruptcy trustee is saying not so fast.
Both sides were in the U.S. Bankruptcy Court in Chattanooga Thursday morning at a hearing many expected would bring about a finalization of an agreement between the U.S. Trustee and Marcus D. Lyons for purchase of the speedway for $1.1 million.
That “proposed order” for sale was entered to the court on Nov. 19.
A hearing that could have led to approval of the agreement was held Dec. 12.
But, it was at the hearing that Trustee Jerrold D. Farinash asked the court to grant a move for proceedings to Thursday.
He told the court at the time there had been more interest in purchasing the site and keeping it as a speedway.
However, a representative for Lyons told the court Thursday he had withdrawn his offer on Dec. 10 — two days before the previous hearing was held.
Attorney Ellie Hill of Patrick, Beard, Schulman & Jacoway in Chattanooga told the court there is “no offer on the table at this time.”
“We withdrew the offer by hand delivery and email,” Hill told the court.
She also questioned how the proposed agreement could be valid when the trustee was still hearing other offers from potential buyers after the proposal had been submitted.
Farinash called the filing of the agreement “an act of acceptance” and requested the court allow him to submit a written brief or argument on that issue.
Judge John C. Cook ruled Farinash would have 21 days in which to file his arguments. Attorneys for Lyons would then have seven days to respond.
Hill would not respond to requests for comment.
Another hearing will be held on Feb. 27.
After the hearing, Farinash explained that for a trustee to sell property in a bankruptcy case, the trustee has to get the court’s approval.
“When Mr. Lyons’ made his offer, I asked the court to approve the sale,” Farinash said.
He acknowledged Lyons “attempted to remove his offer” before the Dec. 10 hearing.
“I think he can’t withdraw and that’s the element of the dispute we have right now,” he said. “They made an offer they signed. I asked the court to approve it. I think that’s a binding contract.”
Farinash said he was asking the court to proceed with approval of the sale “to preserve my right to possibly take action against Mr. Lyons in the event we did not sell it for as much as he was willing to pay.”
Farinash also added a rain cloud over any hopes an active speedway would return to the site.
“Based on all I know, I think the chances of a speedway returning there is not likely,” he said. “We’ve not been able to find anybody who is willing to pay what is necessary to buy the property in order to run it as a speedway.
“I’d love to sell it as a speedway. I’d love to preserve it as a speedway. I’d love to find somebody who wants to operate it as a speedway. But, the ability to operate it as a speedway has to be compenserate with the value of the property as real estate,” Farinash said.
He said it has significant value as real estate, but there hasn’t been anyone who wanted to run it as a speedway who wants to pay the value of the property.
Farinash has previously said there would be major expenses involved to make the necessary repairs to the facility to maintain its usefulness as a speedway.
He said the new legal issue places no hindrance to him in finding a buyer for the property, including the possibility of an auction.
“If somebody showed up and said I’ll pay you ‘X’ dollars, I’d take it in a heartbeat,” Farinash said.
“My job is maximize the return for the creditors,” he said. “We certainly try to be cognizant of people keeping their jobs. It is a landmark in the area. But, at this point in time based on the work we’ve done, we don’t have a really good feeling that anybody is going to come forward and offer enough money to buy it and operate it as a speedway.
“If my choice is to pay the creditors more money and it’s not a speedway, that’s the choice I have to make,” he said. “I’d much rather find somebody to operate it as a speedway.”
He said there was another interested buyer, but that party purchased another speedway.