Cannondale completed the Section 363 sale of its assets on Friday, enabling the company to emerge from bankruptcy protection within ‘the next several weeks” following the court’s anticipated approval of the auction and the subsequent closing of the sale.

The company filed for Chapter 11 protection in late January 2003 listing assets of more $105 million in liabilities and over $114 million in assets.

The auction produced a fairly predictable outcome, with an affiliate of Pegasus Partners II, one of Cannondale’s largest creditors, emerging as the victor in the bidding. PPII had the inside track after being named by the court as the “stalking horse” in the auction.

PPII was expected to bid $57.8 million in the opening round of bidding. The terms of the winning bid were not disclosed.

Pegasus holds approximately 27%, or $28.5 million, of all Cannondale liabilities.

Elizabeth Fox of Fox Racing Shox, Chairperson of the Official Committee of Unsecured Creditors, stated that in connection with the auction process, the committee reached a favorable agreement with Pegasus and fully supports the sale to Pegasus.

Pegasus had stated in late January that it was commited to working with current management and operating the bicycle business as a going concern. Pegasus has indicated that it does not intend to operate the motorsports division, even though it was included in the purchase.