Are the Devils in bankruptcy trouble? UPD: Chambers to pay $25m to exit?

[Marv4Life]

Assuming they get a free arena courtesy of taxpayers you may be right. Hold it, is not that the problem in NJ?

It wasn't technically taxpayer funded. The arena was 2/3rds settlement form the Port Authority of New York/New Jersey, 1/3rds from the CIT loan from the Devils.

 

[Baemon Severson*]

Frankly I don't think that's about winning or the fans being spoiled. I went to several Devils all throughout the 90s and most of the time we ended up there because there was no tickets available to the Rangers games. And everytime it was deserted and me and my friends we kept changing seats since there was noone there.

you do realize that Dolan buys all the unsold tickets at MSG, right?

 

[Fugu]

Incase no one saw this.
http://prohockeytalk.nbcsports.com/...s-claim-that-bankruptcy-report-is-inaccurate/

Yes, but now we have two conflicting versions from the 'approved' sources.

One says JVB is buying out his partner, and the other says he's lining up investors, who weren't interested until the asking price for Chamber's share of the arena + team dropped by 20% from $200 million. This should happen within the next 45 days. (At least no one said imminently or two weeks, or I'd blow a gasket.)


It's a ton of money. And the lender had to defer the due date by two months.

 

[Colin226]

The New Jersey Devils, which missed a $100 million principal loan payment Sept. 1, have taken a small step toward a financial recovery after principal owner Jeff Vanderbeek reached an agreement to purchase co-owner Ray Chambers’ 47-percent stake in the franchise, The Post has learned.

Read more: http://www.nypost.com/p/news/business/devils_deal_in_the_works_hiwL0s84sfpN9d6Tss7XYP#ixzz1XqGNmvuF

Well it looks like I may have been right in thinking that Jeff would be buying the other 47% share of the team.. Seems like the financial health of the team isn't so bad if he has that kind of cash

 

[Fugu]

Well it looks like I may have been right in thinking that Jeff would be buying the other 47% share of the team.. Seems like the financial health of the team isn't so bad if he has that kind of cash

Yes, but check this one out:

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html

In fact, two people familiar with the relationship between the team and its lenders said the deadline for the loan payment had been pushed back almost two months and an agreement to sell a 47 percent share of the NHL club to someone other than Devils chairman Jeff Vanderbeek could be completed in the next 40 to 45 days.

Edit: wanted to add this footnote from your link-- just to keep track of details.

CIT is the lead lender on the roughly $100 million five-year loan, and has been getting out of sports lending, sources said.

 

[Colin226]

Yes, but check this one out:

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html

The smilie is pretty spot on for this whole situation

 

[MaskedSonja]

Yes, but check this one out:

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html






Edit: wanted to add this footnote from your link-- just to keep track of details.

So, who's buying then? Vanderbeek or "someone other than Vanderbeek"?

 

[Colin226]

So, who's buying then? Vanderbeek or "someone other than Vanderbeek"?

Apparently no one really knows for sure, but Tom Gulitti said to expect an announcement around the start of the season

 

[TheDevilMadeMe]

Frankly I don't think that's about winning or the fans being spoiled. I went to several Devils all throughout the 90s and most of the time we ended up there because there was no tickets available to the Rangers games. And everytime it was deserted and me and my friends we kept changing seats since there was noone there.

You realize how long ago the 90s were, right?

The team had an incredibly young fanbase then (young = no $) and was located in the middle of nowhere.

 

[Devils Dominion]

You realize how long ago the 90s were, right?

The team had an incredibly young fanbase then (young = no $) and was located in the middle of nowhere.

It was also a cavernous building that held 19k for hockey.
Though we did average over 17k per game around 1997.

Aside from a few early season clunkers (Games same nights as Yankees playoffs) and major snowstorms last season, I thought attendance was strong in the second half of the season (considering how bad the team was in the first half of the season in this tough economy, a shock to most Devils fans who are used to winning).

 

[LadyStanley]

Comment on NHL Home Ice was that it'll be harder (financially) when the Nets leave for their new Brooklyn home (as they're currently sharing facility).

 

[danishh]

Yes, but check this one out:

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html






Edit: wanted to add this footnote from your link-- just to keep track of details.

CIT is the lead lender on the roughly $100 million five-year loan, and has been getting out of sports lending, sources said.

does it not strike anyone as odd that the devils would only get a 5-year term on that? Was that loan always intended to be a stopgap?

 

[LadyStanley]

http://www.theglobeandmail.com/spor...139&utm_source=twitterfeed&utm_medium=twitter

The New Jersey Devils are in serious financial trouble and may be in default on a large loan payment but they are not about to slide into bankruptcy and a bank repossession. At least not until next June at the earliest.
Thanks to something called a “stand-stillâ€, the Devils’ lenders cannot make a move on co-owners Jeff Vanderbeek, Ray Chambers, Mike Gillfillan and Peter Simon until a minimum of 180 days passes after a missed payment. And if the 180 days end during the NHL season, as they would in this case, then the banks are bound to “stand still†until the day after the last game of the Stanley Cup playoffs.

Every loan to an NHL franchise has a stand-still agreement in the consent letter between the team, the banks and the league. It is there at the insistence of NHL commissioner Gary Bettman, who is understandably averse to seeing one of his teams pushed into bankruptcy by an unhappy lender in the middle of a hockey season.
The consent letter forces the banks to wait a minimum of 180 days after they declare a team in default on its loan before moving to take over the team and place it into bankruptcy. Not only does this spare the NHL some embarrassment during the season, it gives the team owner and Bettman to find new financing and work out an agreement with the lenders.

...
The lead lender on the Devils’ loan, which reports say is $100-million (all currency U.S.) and was due to be paid on Sept. 1, is CIT. Devils Arena Entertainment owes another $180-million, so things are far from rosy in Newark.
At this point, Vanderbeek and the Devils say they are not about to fall into bankruptcy and they already negotiated an extension on the $100-million payment. After that, things get murky.

Those close to Vanderbeek are hinting a buyer for Chambers’s shares has been found, but a banking source is dubious. The New York Post, which reported the loan default on Monday, said on Tuesday that Vanderbeek plans to buy the Brick City shares.
Our banking source is also dubious about this, simply because he does not think Vanderbeek has the necessary financial resources.

 

[CGG]

I fail to see how the majority owner trying to become the principal owner and refinancing to meet the needs of a principal owner equals dire straits.

Well, they're already in default on a $100 million loan, and it's not as if that deadline of Sept 1 came out of nowhere and caught everyone unaware. Everyone knew they had to come up with $100 million on Sep 1 and obviously they didn't. Whether it's just a formality waiting for the partner-to-partner sale to complete, or whether it's because there is no pending sale and no one is willing to lend anything close to $100 million on a hockey team in this day and age, we don't yet know.

All things considered, I think "dire" is an appropriate description.

 

[QuizGuy66]

They're not. They got their money from the state. Newark doesn't have any money to build stadiums.

Their rent is insigificant. The rent that they can't claim (why is that...) is around
$1M per year.

NJ was not a party to this arena. The main source of $ for the stadium from the Newark side was gotten from the Port Authority as part of a settlement of rent on Newark Liberty Airport (basically Newark was getting underpaid on the lease for the airport and got a big influx of dollars that largely got put into the arena project).

-QG

 

[Killion]

I too am "dubious" of Vanderbeeks' ability to secure the necessary funding at those price points even with the 20% drop. I cant see any commercial lender's stepping up to the plate; any private investor/group would be looking for a steeper discount and controlling interest minimum.

 

[QuizGuy66]

LOL now the Toronto news sources are chiming in. - might be the only media with less credentials than the Post...

Based on the Post story, guess I gotta figure it's a 3rd party buyer and not Vanderbeek since they always muck it up. Wouldn't surprise me if the real answer is the creation of a partnership with new investors and Vanderbeek at the end which would make both takes on the buyout 1/2 right. (that's of course spec on my part)

-QG

 

[guyincognito]

It wasn't technically taxpayer funded. The arena was 2/3rds settlement form the Port Authority of New York/New Jersey, 1/3rds from the CIT loan from the Devils.

Newark didn't get $200M to get no direct money out of the deal. It was pretty much state money just redirected to them.

Why do you think Booker lost his **** and tried to have the superstructure taken down and scraped?

 

[guyincognito]

NJ was not a party to this arena. The main source of $ for the stadium from the Newark side was gotten from the Port Authority as part of a settlement of rent on Newark Liberty Airport (basically Newark was getting underpaid on the lease for the airport and got a big influx of dollars that largely got put into the arena project).

-QG

That's what they *say*. You need to look at the people involved in securing that money and the deal that says Newark, for their $200M ownership of the arena... only is entitled to $1M and change in rent a year, and apparently doesn't even have to be given that, because it's been held ever since the building opened.

 

[guyincognito]

Yes, but check this one out:

http://www.nj.com/devils/index.ssf/2011/09/devils_insist_team_is_not_goin.html






Edit: wanted to add this footnote from your link-- just to keep track of details.

Like I said yesterday, this story is lost in the fog of crappy hockey reporting. The original story got out in front. Now everyone else is chiming in. Logically, I discredit the original source because in 24 hours they've gone from doomed to sold.

He's also the only person (who isn't parroting), that says both. I think Gulitti hinted they were sold, but saying and hinting are two different things.

The only fact here right now is that they owed $100M to CIT on 9/1/11 with the team put up as collateral. And even within that fact, we don't know if that date was pushed back, or if they defaulted on it to refinance (or go bankrupt in the extreme example)....

 

[Marv4Life]

Comment on NHL Home Ice was that it'll be harder (financially) when the Nets leave for their new Brooklyn home (as they're currently sharing facility).

They survived without the money-losing Nets from 2007-2010. They'll live without them

 

[guyincognito]

The Nets supposedly rent for $250K a night. It's nothing spectacular. I would think the more positive temporary boon is getting summer dates because of the MSG renovations over the next couple of years.

 

[MJB Devils23*]

This news does not make me happy regardless.

 

[pondnorth]

LOL now the Toronto news sources are chiming in. - might be the only media with less credentials than the Post...

Based on the Post story, guess I gotta figure it's a 3rd party buyer and not Vanderbeek since they always muck it up. Wouldn't surprise me if the real answer is the creation of a partnership with new investors and Vanderbeek at the end which would make both takes on the buyout 1/2 right. (that's of course spec on my part)

-QG

You mean the evil Canadian media.If you are talking about the G&M,it seems to me that they have been pretty well bang on for the last 3 or 4 years or since the Coyotes story first broke.Lots of people denying their stories but things sure played out the way they predicted.Like it or not.

 

[Rob]

You mean the evil Canadian media.If you are talking about the G&M,it seems to me that they have been pretty well bang on for the last 3 or 4 years or since the Coyotes story first broke.Lots of people denying their stories but things sure played out the way they predicted.Like it or not.

Broke the story about the Trashers as well.