Gen Con LLC, which has been in Chapter 11 bankruptcy proceedings since February (see “Gen Con Files Chapter 11”), has delayed the filing of its final plan and disclosure statement for emerging from bankruptcy as the result of an eleventh hour offer to purchase that arrived on the day before the plan was to be filed, according to Gen Con Chief Operating Officer Adrian Swartout.   A hearing was held by the U.S. Bankruptcy Court for the Western District of Washington last Friday, November 21st, at which the plan was to be presented, but a delay was granted as a result of the offer, Swartout told ICv2.  Swartout declined to discuss the offer itself. 


Swartout confirmed that Gen Con’s litigation with Lucasfilm (see “Lucasfilm Sues GenCon”) was dismissed earlier this month in anticipation of a settlement.    


The offer to purchase Gen Con's assets, from Gen Con Acquisition Group (via, “an organization to be formed,” proposed a purchase price consisting of an assumption and payment of the Make a Wish debt incurred as part of the last Gen Con SoCal, plus interest; and payments of $900,000 in the first thirty days after closing and additional payments of $400,000 every six months until all approved bankruptcy claims were paid.  Interest from the date of the deal would also be paid. 


In effect, the current owners of Gen Con LLC would be left with an empty shell after the payment of Gen Con’s creditors, so the deal is to acquire the assets of Gen Con in exchange for paying its debts in full; current ownsership would be left with nothing.


The identity of the acquisition group was not disclosed; a lawyer from Louisville, Kentucky is the contact for the group.  It’s also unclear how much money the acquiring group plans to insert into the deal, since the assets being acquired include Gen Con’s cash, which could presumably be used to fund at least some of the payments.    


If there were discounts to any debts negotiated as part of the reorganization plan that Gen Con had prepared to file, the new offer could present a higher pay-out to creditors.  But the timing and security associated with payments would also be a factor for the company’s creditors. 


The proposed Letter of Intent provides for a Breakup Fee of $50,000; there’s also Bid Protection, in the form of a requirement for additional payments of $250,000 in cash or letter of credit over the amount of this offer. 


Conditions to closing include due diligence, a mutually agreeable asset purchase agreement, and approval by the court. 


More to come on this, we’re sure.