August 17, 2007

California investors get rights to Queen Mary for $43 million

This from about the on-goign saga of the bankrupt QM in long beach:

"An investors' group will pay $43 million (€31.64 million) for the right to operate the Queen Mary and develop its waterfront after the only other qualified developer refused to outbid it at a federal bankruptcy auction.

A group called Save the Queen won Tuesday's auction to pick up a 66-year lease. The city of Long Beach, which owns the historic ocean liner, will receive $8.3 million (€6.11 million) from the sale that will pay legal fees and back rent.

"I think this is a really positive result for the city," said City Attorney Robert Shannon. "Now, the real work is ahead of us."

Save the Queen must still negotiate specific terms of the lease with the city and buy out a nonprofit group that subleases operation of the Queen Mary itself.

The 1934 vessel has been docked at a tourist attraction and hotel for nearly 40 years. Save the Queen has said it plans to develop a theme entertainment area that will include additional hotels, shops and restaurants.

The previous leaseholder, Queen's Seaport Development Inc., filed for bankruptcy protection two years ago.

The only other suitor for the Queen's lease was O&S Holdings in Santa Monica, which indicated it would bid $41 million (€30 million). At the U.S. Bankruptcy Court proceedings, however, bidding opened with the $43 million (€31.6 million) from Save the Queen. O&S refused to submit a counteroffer.

O&S contended that Save the Queen's initial bid had technical violations of the bidding procedures and should be disqualified. The offer was later revised, and a federal bankruptcy judge refused to disqualify the group.

"We are obviously disappointed with the result of today's proceedings," O&S co-founder Gary Safely said. "We were the first and, technically, only qualified bidder."

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