December 18, 2005

Queen Mary suitor bails out

Oh dear... and just when it had seemed the Queen Mary problems had been sorted...
This from:
LONG BEACH — A Woodland Hills real estate investor on Friday withdrew his proposal to lead the Queen Mary's operating company out of bankruptcy, once again leaving the ship's future management uncertain.
But another proposal may soon come from a Northern California man who is one of the biggest players in the chess match being played for the historic ocean liner's control.
Queen's Seaport Development Inc., which leases the city-owned ship, had been negotiating for several weeks with investor Michael Adler to help the company emerge from Chapter 11 bankruptcy protection.
But in a statement, Adler said he pulled out because his group was "unable to come to terms with a number of parties involved, and we have not had the adequate clarity or responsiveness needed to go forward."
Adler could not be reached for comment.
Joseph Prevratil, QSDI's president and CEO, said he was not surprised by the move, which came nearly two months after his company chose Adler's Pacific Queen Holdings LLC for the Queen Mary's future.
"It was taking too long," Prevratil said.
QSDI filed for bankruptcy in March after the city asked for nearly $4 million in past rent. The company said it didn't owe the money based on language in its 66-year lease to operate the ship and develop the surrounding 55 acres.
Since the filing, sides have been jockeying to help QSDI emerge from bankruptcy, pay off its debts and, perhaps most important, develop the vacant land around the ship.
In late October, QSDI chose a $35 million proposal from Adler and his partner, music executive David Arden, to end the bankruptcy proceeding. The proposal came with many conditions, including an agreement with the city over the rent issues that landed QSDI in bankruptcy.
City officials said Friday they were making progress with Adler's group. But Amy Bodek, the city's project development bureau manager, said many unanswered questions remained.
Among them: How would Adler calculate the 10 percent cut that the city is entitled to receive if QSDI is sold
But there were other signs of trouble
Arden, the brother-in-law of rocker Ozzy Osbourne who was overseeing entertainment aspects of the proposal, said Friday that he has been out of the negotiations for about two weeks. He declined to offer reasons for his departure.
Enter Ng?
QSDI has until Dec. 28 to keep the exclusive right of submitting its own plan to emerge from Chapter 11. If the company fails to produce a plan, any interested parties can submit plans for the bankruptcy court to consider.
Prevratil said QSDI has remained in discussions with several other potential suitors, even while it was trying to finalize its deal with Adler.
But a new suitor quite familiar with the ship's finances may also be emerging.
QSDI's largest creditor is Barney Ng, a Lafayette, Calif.-based investor who has loaned $24 million to keep the ship viable since the 1990s. To this point, Ng has watched from the background to see who would emerge to run the ship and how they would handle his payment.
But Friday, Ng said he and his investors are assembling a group to make a proposal of their own within two weeks.
"It's our position to come in and see if we can rectify the situation," he said.
The problem with past proposals for the ship and its surrounding land has been too little emphasis on the ship itself, he said. Past proposals have included hotel, retail, time shares, a yacht marina and commercial property for the site.
"They look at the Queen Mary as a detriment to the development of the property," Ng said of other developers. "In my opinion, that is exactly the wrong approach."

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