Bank paves way for Myrtle Beach-based Burroughs & Chapin to buy back stock

dwren@thesunnews.comApril 3, 2013 

— Conway National Bank has opened the door for Burroughs & Chapin Co. Inc. to buy back 6,300 shares of company stock that are part of a personal bankruptcy case involving former B&C Director Larry Biddle, making it unlikely that the family-owned company’s stock will be auctioned off to the public.

The bank this week said in court documents that it will go ahead with a public auction of the shares on April 16, but only if Biddle does not pay off an $857,584 debt plus attorney’s fees and other costs before that date. The bank also said it would let Biddle sell the shares before the auction date if he can find a buyer willing to pay enough to satisfy the debt.

B&C has already agreed to buy the stock. Biddle last month asked the bankruptcy court for permission to sell the stock to B&C for $157.85 per share, which would be enough to pay off the debt. Conway National Bank said this week that it does not object to Biddle’s request.

At the same time, the bank is preparing to auction the shares in the unlikely event Biddle’s sale to B&C falls through.

Biddle could not be reached for comment Wednesday. B&C declined to comment on the matter.

“As a privately-held company, Burroughs & Chapin doesn’t comment about specific information concerning its stock,” said company spokeswoman Lei Gainer.

Conway National Bank has been advertising the stock sale in The Sun News and at the Horry County courthouse since March 26 and “has received several inquiries” from prospective purchasers, according to court documents. The bank said it wants to proceed as if the auction might take place because it “does not want to chill any interested buyers that have already inquired about the sale.”

The auction is scheduled for 10 a.m. April 16 at the Thomas & Brittain law firm in Myrtle Beach. There are three stock certificates totaling 6,300 shares. The bank plans to auction all of the shares collectively and the shares by certificate number to get the best price. Bidding is set to start at $92.89 per share.

The bank’s advertisement points out that Biddle “can get the property back at any time before we sell it by paying the full amount you owe.” That is what Biddle proposed in his court filing last month.

If a public sale occurs, it would be among the largest chunks of B&C stock available to the general public in the history of the company, which has been a driving force for development on the Grand Strand. Biddle has said some B&C family members previously have given or sold small numbers of shares to friends – largely so those non-B&C individuals could enjoy company perks, such as free golf at Myrtlewood Golf Club and free rides at the former Myrtle Beach Pavilion amusement park – but the stock has never been sold on the open market.

Most of the company’s stock is owned by family members of the company’s founders, and the company previously has taken steps to restrict its sale to so-called outsiders. Biddle’s wife, Virginia, is part of the Burroughs family and Larry Biddle formerly served on the company’s board of directors. Virginia Biddle is named as a co-debtor in the bankruptcy.

The Biddles own 19,104 shares of B&C stock, according to court documents. In addition to the shares scheduled to be auctioned, B&C has proposed purchasing enough shares from the Biddles to pay off their unsecured creditors.

The Biddles have filed for Chapter 11 bankruptcy protection, which is a type of bankruptcy that allows debtors time to work with creditors on reorganizing personal or company debts.

Contact DAVID WREN at 626-0281.

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