The Standard-Examiner furnishes further information on the Leshem/Cover-All Inc. Bankruptcy story this morning, providing in the story's lead paragraph that classic Std-Ex Pollyanna spin:
OGDEN — City officials remain optimistic businessman Gadi Leshem will be able to undertake large-scale development downtown even though his California based carpet installation company has declared bankruptcy.For starters, Mr. Schwebke dutifully provides Ogden Chief Executive Officer John Patterson's obligatory "optimistic" take on this matter:
The Chapter 11 bankruptcy filing earlier this month by Cover-All Inc. may give Leshem breathing room from creditors so he can focus on Renaissance Village, a commercial and residential development that’s part of the proposed Ogden River Project, John Patterson, the city’s chief administrative officer, said Thursday.The best that Boss Godfrey can muster up is "hopefulness," which is a few clicks shy of optimistic, at least on our WCF B.S.-O-Meter:
“He (Leshem) has given us assurance that this would not impact the River Project or his commitment to Ogden,” Patterson said of the company’s bankruptcy filing. [...]
Ogden Riverfront Properties is a separate legal entity from Cover-All and likely won’t be affected by the bankruptcy, Patterson said.
Mayor Matthew Godfrey said he’s hopeful Leshem will be able to follow through with his development plans.What ought to be clear from these above statements is that neither of these Ogden City officials has the slightest clue whether Mr. Leshem's bankruptcy filing will impair Mr. Leshem's River Project. They're as much in the dark as anyone else, it would appear.
The city will have a better idea of whether the Cover-All bankruptcy will affect those plans later this year when Leshem is required to pay for the demolition of boarded-up houses in the river project area, Godfrey said.
But interestingly, the ever-resourceful Ace Reporter Schwebke finally gets down to business, and drags out some revealing commentary from former Ogden Community Community and Economic Development Department Director Dave Harmer, whose view falls quite a distance from optimistic (or so it seems to us):
Leshem’s largest obstacle will be convincing skittish lenders to invest money in his project amid an economic downturn, said Dave Harmer, who retired in October from his post as the city’s community and economic development director.Assuming that Mr. Harmer is right, and that Mr. Leshem's further pursuit of his Renaissance Village Project will depend upon Cover-All Inc. "profits," we believe we can see where this story is leading. It's difficult to imagine that the revenue from a company which has $1 million in assets, and is upside down with its creditors to the tune of $42 million, would allow Mr. Leshem to qualify for construction financing, in this, or any other credit market.
“The biggest thing is the lending situation,” Harmer said. “Before he can do anything he’s going to have to secure financing.” [...]
In the past, Leshem has relied on Cover-All profits to help fund its investments in Ogden, Harmer said.
Adding insult to injury, this morning's article reels off a list of other obstacles which don't bode well for Mr. Leshem or his troubled company, even assuming he is able to work out a viable Chapter 11 Reorganization Plan.
We don't know about the rest of our Weber County Forum readers, but for our own part... suffice it to say that we're not exactly brimming with optimism for the prospects of Gadi's Renaissance Village Project.
We'll even go out on a limb on this and hereby predict the imminent listing for sale of Gadi's fifty properties, under supervision of the U.S. Bankruptcy Court Trustee. If Gadi truly desires to save his company, the expeditious liquidation of these properties is by far the most logical approach.
Our compliments to Scott Schwebke, by the way, for digging out and providing for his readers a robust array of pertinent facts.
Reader comments are hereby invited.
