Under that circumstance, no auction was held this morning and Cleveland businessman Allan Jones’ bid of $1.9 million will stand alone on Friday when a final sale hearing is held.
Counsel for Hardwick Clothes determined the bid did not meet the specifications as outlined by the order of the U.S. Bankruptcy Court on April 15.
Hardwick’s counsel noted two specific items which caused the bid to be denied.
The court order states a competing bid “must be accompanied by a cash deposit of 10 percent of the initial overbid, all of which shall be refundable to an unsuccessful bidder.”
It also states that the bid “must be for cash and not subject to any financing contingencies.”
The counsel says there was no cash deposit paid by Williams.
“Instead, you have proposed an assignment of a right in a cash account which will be available in conjunction with a like kind exchange at some point unknown to us,” states the notice from Chambliss, Bahner & Stophel P.C.
Hardwick’s counsel also said the bid and attachments which were filed with the court have “insufficient documentation and evidence of ability to pay cash for the overbid amount.”
“The commitment letter you attached is conditional and subject to a number of contingencies,” the notice says.
Williams’ filing with the court showed “an assignment from Joe V. Williams III as a cash deposit of 10 percent” for the amount of $210,000.
Williams had proposed using a complicated financial structuring that would have used an “exchange agreement” whereby the value of property Williams holds on Lookout Mountain would be used to fund the deposit.
Williams had also filed documents from an agreement with The Signature Group for a five-year loan of $3,125,000, with $3 million dedicated to the acquisition of Hardwick.
Hardwick President Tommy Hopper said the Williams bid will not be submitted.
The only bid that is on the table is that of Jones CapitalCorp. and that is the bid Judge Shelley D. Rucker will be asked to approve Friday at 9:30 a.m. in U.S. Bankruptcy Court in Chattanooga.
That does not make the sale to Jones a sure thing.
Objections to the sale can still be filed with the court until 4 p.m. Thursday.
Should there be any filed, the court would take the matter up during the sale hearing.