Massive entertainment complex next to Pro Football Hall of Fame considered bankruptcy – but couldn’t afford the filing fee

A major entertainment complex next to the Pro Football Hall of Fame in Ohio considered filing for bankruptcy, but could not afford the filing fee.

The Hall of Fame Resort & Entertainment Co. was in a “distressed situation” and was “unable to fund ongoing operations,” according to a filing with the Securities and Exchange Commission last week.

The company, which is developing the football-themed Hall of Fame Village, considered declaring Chapter 11 bankruptcy because of its cash flow issues, but “determined that it could not afford the costs associated with filing,” the document states.

HOVF expected to run out of cash by November 18 last year, and entered an interim funding agreement with CH Capital Lending for a loan that has increased to $8 million.

“Absent the interim funding, HOFV’s plan would have been to wind down operations — lay off 90 percent of employees, inform creditors of its inability to make timely payments and cancel upcoming events,” according to the SEC filing submitted by Wedbush Securities.

According to the document, since going public in July 2020, HOFV had “invested in the development of its assets and, while attempting to grow revenue streams, has not achieved profitability.”

Los Angeles-based financial firm Wedbush was hired by the Hall of Fame Resort to advise a special committee of board members tasked with analyzing a proposal to take the company private.

The Hall of Fame Resort’s majority shareholder, Stewart Lichter, offered to buy all outstanding shares for 90 cents per share through an investment company.

In a May presentation to the committee, Wedbush called the 90 cents per share offer “fair, from a financial point of view.” Among the merger’s listed merits was “immediate liquidity for shareholders, in comparison to potential bankruptcy.”

The Hall of Fame Resort’s board authorized the transaction earlier this year, though a shareholder vote has yet to be scheduled.

The Hall of Fame Village is building a football-themed destination surrounding the Pro Football Hall of Fame and Tom Benson Hall of Fame Stadium.

The complex includes sports fields, an indoor Center for Performance, and added businesses, restaurants and attractions such as a Ferris wheel. However, efforts to complete construction of the Gameday Bay water park and start construction on a hotel onsite have stalled because of the financial difficulties.

“Our vision has always been to build a world-class sports and entertainment company, which includes our destination in the Hall of Fame Village, Hall of Fame Village Media, and Gold Summit Gaming,” said Michael Crawford, President and Chief Executive Officer.

“This is an ambitious goal. It entails a continued focus on our strategic plan, and it requires investing in the critical areas that will help ensure long-term growth.

“We operate in a dynamic and sometimes challenging environment, and as a private company upon completion of the transaction we believe that we will have strategic flexibility and additional working capital to invest in each of our business verticals and to continue to build the Company as we have planned.