The auctioneering firm of Flipper McDaniel & Associates from Calhoun, Ga., has been selected to handle the sale of the Cleveland Speedway, which is scheduled to occur at the racetrack July 24 at 10 a.m.
Those actions will take place if a U.S. Bankruptcy Court judge gives approval at a hearing scheduled for July 10 at 10 a.m. in Chattanooga.
The auction, if approved, would bring to a close almost three years of uncertainty as to the speedway’s future.
Court documents state even the agreement between the parties involved was arrived at through “contentious negotiations.”
The agreement suggests expectations of a price not much lower than $1 million will be seriously considered.
The “compromise and settlement” as it is legally termed involves Gladys Johnson, the estate of Joe Lee Johnson, Ronnie Willkomm and U.S. Bankruptcy Trustee Jerrold D. Farinash.
It begins with the timeline of events starting Dec. 16, 2011, when the bankruptcy was filed.
Shortly after Farinash was appointed, an agreement was entered into allowing financing of $25,000 to continue operations as a speedway in 2012
Willkomm, acting as a promoter, operated the speedway for the 2012 and 2013 seasons.
“At the end of the 2013 season, it was decided that further operations would be fruitless and that the assets of the debtor would be fruitless,” the court document states.
The agreement says the Johnson estate holds the first lien and Gladys Johnson has a life tenancy in the payment to be received pursuant to the promissory note which is secured by the debtors’ assets.
The children of Joe Lee Johnson are entitled to the proceeds of the promissory note.
The court filing states while Willkomm acted as promoter, there were no fund to compensate him for the work.
Willkomm claimed an “administrative expense” against the estate for what he would otherwise have been paid as promoter.
There had been a dispute between the parties involved over the exact balance of the loan owed to them secured by the debtor’s assets.
If the sale occurs, the parties will receive payment based on three separate tiers of sale prices.
For a sale of $999,999.99 or less, $545,000 wil be paid to the Johnson estate and Gladys Johnson as full payment of all claims. Willkomm would receive between $100,000 and $165,000 depending on the price as repayment of the post-petition financing and as compensation for his work as promoter for the race seasons 2012 and 2013, with the remainder of the sales price to be paid to the bankruptcy estate.
The amounts increase at the sale price of $1 million and $1,000,001.00 or more.
Should the auction occur, the terms of the sale include a 20 percent down payment at the time of sale with closing to occur within 30 days of the date of sale.
The order also states in bold and capital letters, “This is a cash sale and is ‘as is, where is.’”
Farinash has the right to withdraw any item from sale and “modify the terms of sale as necessary to effectuate the receipt of the highest possible sales price.”
Farinash has been consistent in saying he had hoped to find a buyer with a serious proposal that could have maintained a speedway and satisfied those who are owed money.