While discount and cheap paintball has been the love of the paintball world, it has taken its toll on some industry players.
On December 1, 2008 the NPPL / Pacific Paintball declared Chapter 7 bankruptcy. This will cause a liquidation of the assets along with the business operations under court control.
In statements released along with the announcement, it was stated that their inability to raise funds caused them to take this action. They claimed they had done all they could to keep the business going.
There’s a few other entities related to NPPL that also bit the bullet. The list includes: Pacific Paintball LLC, NPPL LLC, XPSL LLC, PB2X LLC, Xtreme Paintball Fields LLC and Camp Pendleton Paintball LLC.
The surprise kindof is that since a business that intends to clear its debts and come back later declares Chapter 11 so that they have the option of returning some day. This is typically known as a reorganization bankruptcy when it’s Chapter 11.
Pacific Paintball LLC was being run by a group of venture capitalists so for them to file Chapter 7 means that there really is no hope to reorganize & take on new capital to continue going. There was no way foreseeable to them to reorganize the business and turn it around into a high return on investment situation. That is what VCs like to do. So the global financial situation, the erosion of the credit markets specifically, has caused this action.
Now he auctions start. The money received for the assets will be returned to creditors, The affect on stock holders & investors will likely be felt for some time to come. The assets to be sold off include PB2X, Paintball.com, the NPPL & XPSL brand names, and Xtreme Paintball Parks (specifically, Camp Pendleton Paintball Park). The auction will be held in traditional ways so that the highest bidder will receive the asset. It is always unclear in an auction scenario if all assets will be sold together or separately.
There are many comments being made about various articles that have been written already. Most of the comments are around how to move the game forward. Discussions were around whether the leagues should be merged together as they had operated before. And there was discussion on whether all hopes of Paintball becoming an Olympic sport should be abandoned now. There’s also discussion around the fact that the world or in fact no country is quite ready for paintball to become a TV sport yet. Nobody believes that any other investor will come in for those reasons to take the league and all of the properties back to the level they had been.
Some feel that that paintball costs too much to play & there aren’t enough people playing to support multiple leagues. Merging leagues can also devalue the stakes of all the other leagues. The team owners are not motivated to come in & help save the other leagues.
Stay tuned and see how this plays out. The results of the auctions will be interesting!