On the Forecheck
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Del Biaggio case moving along
by Forechecker on 11/21/08 at 10:54 AM ET
Comments (2)
Today’s Globe & Mail highlights the latest step in the Boots Del Biaggio bankruptcy, as L.A. Kings owner Phil Anschutz and former Preds owner Craig Leipold make their case for some relief:
Both Anschutz and Leipold recently filed documents in a California bankruptcy court saying they have reached an agreement on how to divide roughly $2.3-million currently held in Del Biaggio’s accounts at a California brokerage firm.
The only problem is that under U.S. bankruptcy law, all of Del Biaggio’s assets, including the accounts, are to be held until such time as a restructuring plan is approved and they are sold off.
But the lawyers for Leipold and Anschutz argue the accounts “are not necessary for a reorganization as no reorganization is possible here.”
From there on, the speculation launches that if they’re successful in cutting to the front of the line of creditors to divide up these accounts, that Anschutz and Leipold could make a play for Del Biaggio’s ownership stake in the Nashville Predators. The main obstacle along that path is the operating agreement between Del Biaggio and the rest of the Predators ownership group, which gives the locals control over to whom ownership shares can be transferred. The likely case is that Anschutz and Leipold would be in line for whatever funds are generated by the sale of the Boots shares.
Filed in: Nashville Predators | On the Forecheck | Permalink
Tags: Boots+Del+Biaggio, Craig+Leipold, Phil+Anschutz,
Comments
Further update… a commenter over on Mirtle’s blog just pointed out something important:
James, I am afraid that this article written by your colleague is yet another example of why sports reporters should never, EVER, EVER be allowed to write about business stories.
I have reviewed the AEG complaint. AEG is a secured creditor with respect to certain securities accounts held by Del Biaggio which were alleged to contain a number of securities of various blue-chip public companies. He does not hold a security interest in the shares of the Predators, which are themselves not held by Del Biaggio but rather by a separate non-bankrupt corporate entity. AEG does not hold a security interest in the shares of the holding company, either.
Your colleague’s suggestion that “a California-based bankruptcy expert said Leipold and Anschutz could well make the case that the stake should fall to them” is either brutally dishonest or evidence of a profound lack of understanding. As the bankruptcy law prof he quoted correctly said, “If [Leipold or Anschutz] had a security interest in the loan, then he gets first crack at the ownership stake,”. IF HE HAD A SECURITY INTEREST. They do not, as AEG’s own complaint makes clear.
He is correct that “because Leipold and Anschutz are secured creditors, they are asserting “perfected, secured interests” and claim that “no creditors have interests with priority over AEG’s and Leipold’s.” They are not, however, asserting a security interest over the team, but rather over the acocunts in which they DO have a security interest.
Posted by pwnicholson from Nashville, TN on 11/21/08 at 03:04 PM ET
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Agreed with your last sentence. Don’t league rules forbid owners from owning pieces of two different teams? Not that it stopped Leipold from owning two teams in one year and tanking one (Preds), and didn’t stop Anschutz from controlling through proxy Del Biaggio’s bid to try to get a team in KC that much faster (to fill their arena).
Posted by pwnicholson from Nashville, TN on 11/21/08 at 03:01 PM ET