Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 4, 1990 TAG: 9007040151
SECTION: BUSINESS PAGE: B-4 EDITION: HOLIDAY
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: ROANOKE LENGTH: Medium
Michael Sincleair, a Texas industrialist, told Bankruptcy Judge H. Clyde Pearson he would offer $18 million for the exercise-equipment company.
His offer follows an earlier agreement by Dan Baldwin, former Nautilus president, and Charles Ho, a Florida investor, to pay $14.4 million, largely in cash, for the operation.
Pearson ruled that Sincleair must deposit $250,000 with the court as a binding commitment, similar to one made earlier by Baldwin and Ho.
But the stakes were raised when Troy Phillips, their lawyer, said his clients will make a commitment of $1 million before the next hearing Monday morning.
Despite another lawyer's objection that the move amounts to "playing a little poker," the judge suggested that Sincleair also deposit $1 million with the court. Pearson said these were the only offers he's seen.
Baldwin and Ho signed a purchase agreement last month, but Pearson left the buyout open to allow time for other offers.
Most creditors would get more money from Sincleair's purchase, said Benjamin Ackerly, lawyer for Prudential Insurance, a major creditor.
The judge's approval is required because Nautilus filed for reorganization in February, reporting debt of $38.6 million and assets of $27.3 million.
L. E. Creel of Dallas, lawyer for Nautilus, said Sincleair told him he intends "to close the plant [in Independence] and move it to Texas" if his bid is successful. The Independence plant has about 215 employees.
Sincleair heads a joint venture of four major investors, according to James Fulghum, his Roanoke lawyer.
Creel said Sincleair's group hasn't seen the Independence plant, while Baldwin offers management expertise. Baldwin, who lives at Galax, built the Grayson plant in the 1970s and left the company four years ago.
Phillips, lawyer for Baldwin and Ho, said he and his clients have reviewed the company's financial books and "we have an experienced management team . . . We're interested in speed because every day the debtor stays in business its value decreases."
Howard Beck, lawyer for the creditors' committee, said its members believe they should analyze the last offer.
One major difference in the offers is that Baldwin and Ho have a requirement that the buyer would pay Nautilus owner Travis Ward $1.4 million for an agreement that he will not compete with Nautilus.
by CNB