Folks have been surmising and postulating about what will happen in the near future to IP/FS. Some of those ideas could come to pass. Some definitely won’t. One thing for sure, as
narcissistic as IP’s actions have been, some were planned in advance and some were reactions and/or reflexes. In the next 30 days, the Court will determine the exact amount of the bond that IP/FS must post while fighting foreclosure if that is the path he chooses. It is north of $11m. They will also determine how much time IP/FS has to post that money. Likely/usually, as little as 30 days, but no more than 90 days. It cannot be stopped. The denial of the Stay eliminated that possibility. If the money is not posted, foreclosure is a foregone conclusion unless bankruptcy is filed. Bankruptcy (7, 11, or 13) creates an automatic stay of the foreclosure action for 60 days. In the case of a bankruptcy filing, IP/FS may not have to make any bond or money deposit, especially if he can show the LLC/Corp has no cash assets. The group that IP/FS owes money to will want to move this matter along, sooner than later. In a bankruptcy filing, the business can stay open. The lender can ask the court to remove IP from directly operating or having any operational control during the bankruptcy and to have all the bank accounts open to the lender for eval and court monitoring. (yeah, getting complicated and messy here …). Oh, and no matter which of the 3 types of bankruptcy filing that IP chooses, ALL have a financial lookback period. IP cannot hide or fraudulently move assets into personal accounts to avoid paying them to a creditor in the future. Lookbacks can be up to 5 years, depending on the situation.
There are only a few ways that this will or can pan out:
Path 1: IP/FS does not put up any money to fight the foreclosure and foreclosure moves forward. The lender group gives notice to either auction or take possession of the property on a certain date. IP/FS has until that date to fulfill the loan demand or negotiate some kind of settlement. The foreclosure date comes and the lender entity takes possession of the real property (land and buildings). FS ceases as an entity (see below). The range ops close immediately as the lender entity is not in a position to start operating a gun range. It would take them (or anyone they sold it to) a minimum of 6-12 months to reinvent the wheel and open up a new entity gun range at that location.
Path 2: IP/FS files for bankruptcy and delays the foreclosure for a minimum of 60 days. If the court grants bankruptcy proceedings and action, this thing could go on for 12-24 months, during which time operations could be open or closed. But, the courts will be involved and watching IP actions closely. The lender could move to have IP removed and a court-appointed Trustee to run operations. Either way, memberships do not have to be honored and IP/FS is shielded from any cause of action when he or the new owners of the facility rewrite all the memberships to meet a new sound financial test. IP will have to renegotiate all current liens and loans. Which brings into question why he hasn’t declared bankruptcy and renegotiated them already? If IP cannot create a repayment agreement (which could be for the total amount of $11m +) on a longer term, it’s over. And in bankruptcy, if you don’t make your payment, the jig is up.
Notes: IP owns the trademark and rights to the name and intellectual icon of FS. That cannot be taken by the lender or the court. So, any foreclosure will remove that name at that site forever. The lenders simply own the real property and its improvements. They do not own nor will they receive any non-real property (guns, ammo, chairs, tables, goods …).
I just don’t get what IP is doing. Is he smart, like a fox, or just lucky and shooting from the hip? Pay no attention to the man behind the curtain? Well, it's curtain-call time friends! The summary of both paths is that, in as little as 60 days, or as long as 12 months, FS, as we know it, will no longer exist or operate as it once did. All members(ships) will be on the same ground, with nothing to show for their investment. We will all start over from scratch. We will all have to accept a new reality, regardless of who or what entity is offering it, and regardless of what we paid in the past for that membership. The lender is not in a position, nor interested in running a gun range training grounds. They are business people and simply want to get their money back. They are owed a lot more money than the property is probably worth or we wouldn’t be having this discussion. And, what group of folks wants to pony up $6-15 million just to release the liens or buy the property, and another $5 million operating capital to restart the business? It is hard. The current lender entity will likely have to settle for much less than is owed, to not take possession in foreclosure. Maybe that was IP’s plan all along. But who in their right mind would ever loan IP money again? There is no longer a future as IP/FS portrayed it to be, as long as IP is at the helm. He can never raise the working capital to build a resort destination. A revived and reborn gun training range is the best use and the best hope for the location, albeit, without the pomp and circumstance that was promised. Too many developed ranges for the demand at this point. Give me some more food options on-site (café or restaurant). Not much else is needed. The only real value to the property is the road into FS and the water rights. Lead abatement is a nightmare.
— Gary Short