Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, July 20, 1990                   TAG: 9007200253
SECTION: BUSINESS                    PAGE: A5   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

NAUTILUS BIDDER CLAIMS FACTORY BLOCKED HIS OFFER

His move, announced Thursday in Bankruptcy Court in Roanoke, leaves only approval by Prudential Insurance, a major creditor, as an obstacle for the court to accept a bid by Charles Ho, a Florida investor, and Dan Baldwin, former Nautilus president. The creditors committee has backed the Ho-Baldwin offer of about $14.6 million.

Baldwin said he is so confident of acceptance that he is planning to take over the Independence operation about Aug. 11.

However, James N. Walker, Sincleair's lawyer, complained in a letter that L. E. Creel, a Nautilus lawyer, imposed purchase terms on Sincleair "substantially more onerous" than those placed on the Ho-Baldwin group. Both Walker and Creel are from Dallas.

Walker's letter said Creel's "outrageous, blatant and groundless attempts to stifle and block my client's efforts" to buy Nautilus led Sincleair's major lender to back away from his commitment and a backup lender to require a $350,000 fee.

Despite his termination and the loss of this financial backing, Sincleair "remains ready, willing and able to purchase the assets of Nautilus" if Creel makes the same commitment and requirement to him as he made to Ho-Baldwin, according to the Walker letter. Walker sent a copy to Bankruptcy Judge H. Clyde Pearson in Roanoke.

At least one of Creel's conditions for negotiating with Sincleair was impossible to meet, said James Fulghum, Roanoke lawyer for Sincleair. Creel had required Sincleair to get approval of Meritor Savings Bank, a Nautilus creditor, although Meritor has agreed not to discuss an offer with any buyer, Fulghum said.

After Thursday's brief hearing, Creel said he will negotiate with a Prudential Insurance lawyer toward settlement of their differences. "We're about $1 million apart," he said.

The Nautilus creditors committee placed its support behind the Ho-Baldwin offer after that group sweetened its offer of payment for unsecured creditors by $225,000. As a result, these creditors probably will get about 40 cents for each dollar claimed against Nautilus, according to Howard Beck, lawyer for the committee.

Creditors have been critical of a requirement in the Ho-Baldwin offer to pay more than $1 million to Travis Ward, Nautilus owner, for an agreement that he will not compete with Nautilus after the sale. The creditors would like that money to be paid on their claims.