The Dallas Stars plan to file for bankruptcy this week and sell the club at auction.
It's no secret that the Dallas Stars have had money troubles for a while. Tom Hicks, recently dropped from Forbes list of billionaires in 2010, formerly owned the Stars and defaulted on $525 million in loans after missing interest payments. Hicks was sued in August of this year by the team's post-bankruptcy administrator over parking lots and use of funds at the Rangers' and Cowboys' stadiums.
Vancouver businessman Tom Gaglardi, chairman and chief executive officer of Sandman Hotels, Inns & Suites and Moxie's Restaurants, is the lead bidder for the team under the pre-packaged bankruptcy plan.
Gagliardi isn't new to hockey. For one, he's Canadian. Back in 2004, Gagliardi vied for the Vancouver Canucks when he and Ryan Beedie, president of the Beedie Group, launched the high-profile legal challenge to the team’s sale after Aquilini, their former colleague, allegedly scooped the hockey team by using inside knowledge of their negotiating tactics.
Later, he teamed with National Hockey League players Jarome Iginla, Shane Doan, Mark Recchi and Darryl Sydor to form River City Hockey Inc. and buy the Kamloop Blazers franchise. His partners all played in Kamloops during their junior hockey days. Gaglardi fronted half of the more than $7 million needed to buy the club.
Although Gagliardi's involvlment with the Stars deal is considered by some to be a "stalking horse bid" to lure other budders, according to Bloomberg, more than two-thirds of the lenders holding Stars' bank loans supported the proposal for the Dallas Stars bankruptcy. The bankruptcy is expected to be filed this week in Wilmington, Delaware.
The Stars aren't the only team owned by Hicks to go into bankruptcy. The Texas Rangers filed last year and were sold to a group that included Hall of Fame pitcher Nolan Ryan for $593 million.
And they aren't the only team to file bankruptcy, the Stars becoming the fifith professional sports team to file in the past two years with the Los Angeles Dodgers, Chicago Cubs, and the Phoenix Coyotes. Like the Stars, the NHL took ownership of the Coytes and still seeking a buyer to keep them in Arizona.
The bid will, of course, be open to higher bids, but no other buyers have shown interest. The Stars have been on the auction block for more than two years.
"With the Stars, I don't think you'll see a bidding war," said Michael Cramer, who was president of the Stars holding company from 1998 to 2004. He said so long as the deal is considered fair by creditors, he doubted there would be any challenge to the proposed sale to Gaglardi.
Rumors have been around off and on about Mark Cuban buying the team, but there is nothing substantial. Gagliardi offered $230 million for the Dallas Stars team and half the American Airlines Center. Mark Cuban owns the other half, which is why some think Cuban might tender a surprise bid.
Hockey seems to be in a financial crisis lately, as the New Jersey Devils missed a payment on September 1st. However, co-owner Jeff Vanderbeek, according to The Globe and Mail, plans to buy out his fellow owners and refinance. The Devils have received a bank loan extension as well.
Having the ownership situation settled in Dallas would certainly provide a more stable base for the Stars to work from, and hopefully, move forward. Gagliardi may be a Stars owner yet.
Comments