Sabres officially file for Chapter 11
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Associated Press
BUFFALO, N.Y. -- The Buffalo Sabres filed for bankruptcy protection Monday, becoming the second NHL team in a week to seek relief from creditors.
Commissioner Gary Bettman said the Chapter 11 filing in U.S. Bankruptcy Court in Buffalo is a step toward resolving the financial problems that put the Sabres under the league's control in June. The team is for sale.
"It will enable the Sabres to secure financing that will allow them to continue to operate in the ordinary course, subject to league supervision, while the sale process is completed,'' said Bettman, who planned a news conference Monday afternoon.
Court papers indicate the team owes its 40 largest creditors more than $206 million. Creditors include the City of Buffalo, which lists a $750,000 claim for ground rent, and current Sabres players Curtis Brown ($133,000), Jay McKee ($133,000) and Brian Campbell ($25,000), owed deferred signing bonuses. The NHL's Pension Society lists a $29,937 claim.
Other creditors include the Vancouver Canucks, who list a $442,000 claim for an unspecified contract, and former Sabres player Brad May (now of the Phoenix Coyotes), who's owed $104,000 in deferred compensation.
The Ottawa Senators filed for bankruptcy protection Thursday with a debt load of more than $160 million.
Buffalo Sabres spokesman Mike Gilbert said the team wouldn't comment immediately.
"I don't think this is any surprise to anyone,'' Mayor Anthony Masiello said. "I think this could be a solution to stabilize the team. It could be a solution that leads to more stabilized ownership, and obviously when you reorganize debt, you make the asset better, not worse.''
The NHL took over the Sabres after the financial downfall of owner John Rigas and his Adelphia Communications Corp., itself now under bankruptcy protection.
Adelphia is the team's largest creditor, listing a $130 million claim, according to court papers. The money was used by Rigas to help purchase and operate the franchise.
Bankruptcy would cleanse the Sabres of their debt and allow a new owner to renegotiate any existing concession and arena labor agreements. But it also opens the possibility of the team's being sold to an outside bidder who could move it elsewhere.
A bid to buy the Sabres by Buffalo businessman Mark Hamister is being held up by the state's reluctance to refinance a $22.9 million loan as part of a $33 million request for state assistance.
The problem is not the loan itself, but that Adelphia holds the letter of credit on the loan, which was used to help finance the construction of HSBC Arena, the Sabres' home.
Hamister and his majority partner, Todd Berman, were granted a second one-week extension from the NHL on Friday to secure their financing to purchase the team.
Hamister spokesman Earl Wells had no immediate comment on Monday's filing.
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Associated Press
BUFFALO, N.Y. -- The Buffalo Sabres filed for bankruptcy protection Monday, becoming the second NHL team in a week to seek relief from creditors.
Commissioner Gary Bettman said the Chapter 11 filing in U.S. Bankruptcy Court in Buffalo is a step toward resolving the financial problems that put the Sabres under the league's control in June. The team is for sale.
"It will enable the Sabres to secure financing that will allow them to continue to operate in the ordinary course, subject to league supervision, while the sale process is completed,'' said Bettman, who planned a news conference Monday afternoon.
Court papers indicate the team owes its 40 largest creditors more than $206 million. Creditors include the City of Buffalo, which lists a $750,000 claim for ground rent, and current Sabres players Curtis Brown ($133,000), Jay McKee ($133,000) and Brian Campbell ($25,000), owed deferred signing bonuses. The NHL's Pension Society lists a $29,937 claim.
Other creditors include the Vancouver Canucks, who list a $442,000 claim for an unspecified contract, and former Sabres player Brad May (now of the Phoenix Coyotes), who's owed $104,000 in deferred compensation.
The Ottawa Senators filed for bankruptcy protection Thursday with a debt load of more than $160 million.
Buffalo Sabres spokesman Mike Gilbert said the team wouldn't comment immediately.
"I don't think this is any surprise to anyone,'' Mayor Anthony Masiello said. "I think this could be a solution to stabilize the team. It could be a solution that leads to more stabilized ownership, and obviously when you reorganize debt, you make the asset better, not worse.''
The NHL took over the Sabres after the financial downfall of owner John Rigas and his Adelphia Communications Corp., itself now under bankruptcy protection.
Adelphia is the team's largest creditor, listing a $130 million claim, according to court papers. The money was used by Rigas to help purchase and operate the franchise.
Bankruptcy would cleanse the Sabres of their debt and allow a new owner to renegotiate any existing concession and arena labor agreements. But it also opens the possibility of the team's being sold to an outside bidder who could move it elsewhere.
A bid to buy the Sabres by Buffalo businessman Mark Hamister is being held up by the state's reluctance to refinance a $22.9 million loan as part of a $33 million request for state assistance.
The problem is not the loan itself, but that Adelphia holds the letter of credit on the loan, which was used to help finance the construction of HSBC Arena, the Sabres' home.
Hamister and his majority partner, Todd Berman, were granted a second one-week extension from the NHL on Friday to secure their financing to purchase the team.
Hamister spokesman Earl Wells had no immediate comment on Monday's filing.
