State Fair operator to liquidate
- March 7, 2012
The future of the State Fair of Virginia is uncertain. The fair’s nonprofit operator, Richmond-based SFVA Inc., today announced plans to liquidate its assets after failing to reach an agreement with creditors.
As a result, SFVA will not produce the State Fair, Strawberry Hill Races and Meadow Highland Games & Celtic Festival. The fate of those events may be determined in bankruptcy proceedings.
SFVA had filed for Chapter 11 bankruptcy court protection from creditors in December after it was unable to restructure about $85 million in debt incurred in developing Meadow Event Park in Caroline County as a new fairgrounds.
The fair’s former home in Henrico County was bought by Richmond International Raceway in 1999. The first fair at Meadow Event Park was held in 2009.
The State Fair began in the 1850s in what is now Monroe Park in Richmond.
SFVA was unable to meet debt payments after the value of its $42 million investment fell to less than $20 million during the financial crisis of 2008-09.
In court papers, the organization accused creditors of forcing it to sell its investments at the bottom of the market cycle in spring 2009. Returns from the portfolio had been used to make debt payments, and the portfolio itself served as collateral for some loans.
The Chapter 11 filing now is being changed to a Chapter 7 liquidation. Seventeen SFVA staff members have been laid off.
In a news release, SFVA said it offered to buy the 360-acre Meadow Event Park from a lender group of secured creditors as a way to emerge from Chapter 11. (The lender group includes lead lender ArborOne Farm Credit, 13 other farm credit banks and the U.S. Department of Agriculture.) On Monday, SFVA said, the lender group rejected the offer and refused requests to make a counter offer.
“As chairman of SFVA, I am deeply saddened and disappointed by the lenders’ decision,” G. William Beale, chairman of the SFVA board of directors who also is chairman and CEO of Union First Market Bank. “We worked diligently withmultiple parties to present the secured creditors with a reasonable offer to purchase The Meadow, and thus allow
the 156-year-old tradition of the State Fair of Virginia to continue. Unfortunately, that offer was rejected.
Apparently, the secured creditors have other unknown plans for the property,”
South Carolina-based ArborOne issued this statement: “Unfortunately, the State Fair of Virginia…has been unable to obtain sufficient financing to sustain its business operations for fiscal year 2012 on a profitable basis or to purchase the remaining collateral as set forth in an order entered earlier in the SFVA’s bankruptcy case. Based on the court order, which was agreed to by the Fair, the lender group will take possession of the real estate and remaining personal property on March 7.”
SFVA said it has asked the creditors to release the rights to its events, including the State Fair. “The fate of these events and the property will be determined by the Chapter 7 process and ultimately up to the court-appointed
trustee,” SFVA said in news release.