Trinity countersuing Melnyk for 1 Billion

[harrisb]

How did he lay additional debt on the team?

Financed the entire purchase thus having massive debt repayment since day 1. Because of this the team itself has incurred additional losses that have again been refinanced in to the team. Remove the debt and this recurring wheel of debt financing never happens. Even with the debt he has about a $200m return on an investment of zero, poor Eugene....

Now, if he’d have used profits from the other entities with which the team are tightly aligned, this situation never happens. Perhaps even use those other entities to, gasp, repay debt.

 

[JD1]

Financed the entire purchase thus having massive debt repayment since day 1. Because of this the team itself has incurred additional losses that have again been refinanced in to the team. Remove the debt and this recurring wheel of debt financing never happens. Even with the debt he has about a $200m return on an investment of zero, poor Eugene....

Now, if he’d have used profits from the other entities with which the team are tightly aligned, this situation never happens. Perhaps even use those other entities to, gasp, repay debt.

We're all entitled to our opinions i guess

He bought the team without injecting any money? so the team was bankrupt and owed 300m and along comes Eugene and he acquires the team without putting any money towards the 300m owed? That's a pretty neat trick to pull that off

 

[harrisb]

We're all entitled to our opinions i guess

He bought the team without injecting any money? so the team was bankrupt and owed 300m and along comes Eugene and he acquires the team without putting any money towards the 300m owed? That's a pretty neat trick to pull that off

He received the team and all associated assets for around 120m, he financed all of that. Meaning he didn’t use his own money and started with debt from day 1. Is this that difficult to understand?

Let’s say that equated to 10m per season in debt charges, he’s since doubled that so figure 15m average. 15x15 = 225m which coincidentally is right around where the team debt lies right now. Hmmm

 

[harrisb]

He now has CSMI in a 1B lawsuit, thus making the team worthless until this is settled. I can believe he is losing money now and the structural debt he created will force a sale. Any buyer will not move forward till these lawsuits are settled, probably makes sense as to why Devcore would proceed with the rendezvous plan. This is about the only way to acquire the team and settle the lawsuit in one swipe. Melnyk sells and drops his lawsuit, trinity and the new ownership CSMI continue with the develop thus having trinity drop their lawsuit.

 

[Tnuoc Alucard]

Judge grants Ottawa Senators bankruptcy protection | CBC News


Melnyk submits bid for Senators | CBC Sports



Creditors approve Melnyk's purchase of Sens | CBC Sports


https://www.grbj.com/articles/59748


https://www.grbj.com/articles/59665

 

[NorthCoast]

The obvious answer to your question is no

The real question is do you believe
1. Revenues>expenses
2. Revenues=expenses
3. Expenses>revenues

And at what salary point do the above apply.

Maybe at 68m in salary, number 2 above applies but at 80m in salary number 3 applies

A new owner is obviously not going to make the same decisions. What we can hope for is a new well heeled owner coming in that's prepared to operate in scenario 3. I think Melnyk did that for a decade+ but at this point either cannot or will not continue to do that

Not that he disagree.

But the point I'm trying to make is that with a new owner:

1. New owner rev > EM rev
2. New owner rev = EM rev
3. New owner rev < EM rev

And obviously i think that better business decisions will lead to #1. It's also possible that number 3 happens. But i think it's nearly impossible that #2 happens.

 

[Do Make Say Think]

The self-inflicted damage currently being done to the brand is considerable.

I wonder how that plays in all of this.

 

[supsens]

He received the team and all associated assets for around 120m, he financed all of that. Meaning he didn’t use his own money and started with debt from day 1. Is this that difficult to understand?

Let’s say that equated to 10m per season in debt charges, he’s since doubled that so figure 15m average. 15x15 = 225m which coincidentally is right around where the team debt lies right now. Hmmm

Isnt the debt 135?

 

[Tnuoc Alucard]

He received the team and all associated assets for around 120m, he financed all of that. Meaning he didn’t use his own money and started with debt from day 1. Is this that difficult to understand?

Let’s say that equated to 10m per season in debt charges, he’s since doubled that so figure 15m average. 15x15 = 225m which coincidentally is right around where the team debt lies right now. Hmmm

the reports of the sale to Melnyk said that he paid somewhere between $130 and 150 million US for the team and the arena.

The Senators franchise had a reported Debt load in excess of $300 million, just months before Eugene bought the team.

So are you telling us he financed the $130-150 million US, and took on the $300 million plus debt load?

If so the team/Arena debt would be in the $450-$500 million US range when he "bought" the team in 2003.

 

[supsens]

He now has CSMI in a 1B lawsuit, thus making the team worthless until this is settled. I can believe he is losing money now and the structural debt he created will force a sale. Any buyer will not move forward till these lawsuits are settled, probably makes sense as to why Devcore would proceed with the rendezvous plan. This is about the only way to acquire the team and settle the lawsuit in one swipe. Melnyk sells and drops his lawsuit, trinity and the new ownership CSMI continue with the develop thus having trinity drop their lawsuit.

That depends on the laws in canada, CSMI is a recreation facility design company, and the sens are owned by capital sports&entertainment inc.

 

[supsens]

the reports of the sale to Melnyk said that he paid somewhere between $130 and 150 million US for the team and the arena.

The Senators franchise had a reported Debt load in excess of $300 million, just months before Eugene bought the team.

So are you telling us he financed the $130-150 million US, and took on the $300 million plus debt load?

If so the team/Arena debt would be in the $450-$500 million US range when he "bought" the team in 2003.

The debt would be earased through bankruptcy and the 130 would be split and paid to the creditors, I think but I'm not 100%

 

[Que]

The self-inflicted damage currently being done to the brand is considerable.

I wonder how that plays in all of this.

I’d guess Eugene has cost himself 400 million dollars right about now.

If he kept out of the way, never said a dang thing and just wrote cheques and watched games the organization is worth 700-ish million playing at Kanata. With a Lebretton deal green light I’d say this team is worth 950 million. (The arena doesn’t need to be built, just the paperwork in place)

But he did none of that. He couldn’t stay out of the spotlight, couldn’t keep story’s from the presses or throwing players under the buss. Nor did he negotiate in good faith, and screwed up his deal with Ruddy.

So that has brought the value of the franchise down to 550 million imo. If the fire sale continues and the tire fire flairs again in the 2nd half it could slip to 500 million. I think you would have a hard time getting BOG approval selling a team for less than Vegas’ expansion fee.

 

[supsens]

Not that he disagree.

But the point I'm trying to make is that with a new owner:

1. New owner rev > EM rev
2. New owner rev = EM rev
3. New owner rev < EM rev

And obviously i think that better business decisions will lead to #1. It's also possible that number 3 happens. But i think it's nearly impossible that #2 happens.

What about new ownership trying to recoup some of there 500 million and or pay off any loans they make to acquire the team?
You could end up with >Em revenue and +++ >>>> non hockey related cost.

 

[IlTerrifico]

Just wondering if ScrooEuge is using the same forensics team to look into the partnership lawsuit as he did to look into the Matt Cooke assault on Karlsson. If so, I expect the evidence on his side, in about 6 years will be paltry at best.

And bankruptcies sell assets out of the original corporation, and use that to pay creditors as they can, based on legal claim priorities. ScrooEuge would not have been subject to taking on the $300M debt.

 

[slamigo]

the reports of the sale to Melnyk said that he paid somewhere between $130 and 150 million US for the team and the arena.

The Senators franchise had a reported Debt load in excess of $300 million, just months before Eugene bought the team.

So are you telling us he financed the $130-150 million US, and took on the $300 million plus debt load?

If so the team/Arena debt would be in the $450-$500 million US range when he "bought" the team in 2003.

No it was a bankruptcy sale.
Bryden didn't sell the team. The team's creditors agreed to the sale.

 

[JD1]

He received the team and all associated assets for around 120m, he financed all of that. Meaning he didn’t use his own money and started with debt from day 1. Is this that difficult to understand?

Let’s say that equated to 10m per season in debt charges, he’s since doubled that so figure 15m average. 15x15 = 225m which coincidentally is right around where the team debt lies right now. Hmmm

No, its not difficult to understand at all. I don't think it's true mind you, but it's easy to understand. What was widely reported back in the day was the total package was acquired for 125ish and that he put 50 down.

 

[JD1]

The debt would be earased through bankruptcy and the 130 would be split and paid to the creditors, I think but I'm not 100%

You are correct. The monet Melnyk paid, around 125, was used to pay the creditors. It was widely reported at the time that he put 50m down and financed 75m.

 

[JD1]

I’d guess Eugene has cost himself 400 million dollars right about now.

If he kept out of the way, never said a dang thing and just wrote cheques and watched games the organization is worth 700-ish million playing at Kanata. With a Lebretton deal green light I’d say this team is worth 950 million. (The arena doesn’t need to be built, just the paperwork in place)

But he did none of that. He couldn’t stay out of the spotlight, couldn’t keep story’s from the presses or throwing players under the buss. Nor did he negotiate in good faith, and screwed up his deal with Ruddy.

So that has brought the value of the franchise down to 550 million imo. If the fire sale continues and the tire fire flairs again in the 2nd half it could slip to 500 million. I think you would have a hard time getting BOG approval selling a team for less than Vegas’ expansion fee.

950? And an arena needs to be built at lebreton.

Those are some crazy numbers.

 

[supsens]

I’d guess Eugene has cost himself 400 million dollars right about now.

If he kept out of the way, never said a dang thing and just wrote cheques and watched games the organization is worth 700-ish million playing at Kanata. With a Lebretton deal green light I’d say this team is worth 950 million. (The arena doesn’t need to be built, just the paperwork in place)

But he did none of that. He couldn’t stay out of the spotlight, couldn’t keep story’s from the presses or throwing players under the buss. Nor did he negotiate in good faith, and screwed up his deal with Ruddy.

So that has brought the value of the franchise down to 550 million imo. If the fire sale continues and the tire fire flairs again in the 2nd half it could slip to 500 million. I think you would have a hard time getting BOG approval selling a team for less than Vegas’ expansion fee.

What if he was under the impression from day 1 that his team was receiving a 'free' rink? Is it still bad faith?

 

[supsens]

Things of note Ruddy filed new plans that were instantly met with objections from the sens group saying that they were not aproved.
This changed a 3 phase plan into a 2 phase plan. Seems like they decided the rink and all public spaces were to be built first, leaving EM to fund a rink out of pocket instead of profits. It also opens the door for Ruddy to flog his condos at the other site during this time.
You all sure Ruddy isn't in the wrong here?

 

[harrisb]

Isnt the debt 135?

Explain why anyone would take out debt at a higher interest rate than available to them? They wouldn’t. He has 135 through banks, 100m through the nhl and another 30m loc

 

[harrisb]

the reports of the sale to Melnyk said that he paid somewhere between $130 and 150 million US for the team and the arena.

The Senators franchise had a reported Debt load in excess of $300 million, just months before Eugene bought the team.

So are you telling us he financed the $130-150 million US, and took on the $300 million plus debt load?

If so the team/Arena debt would be in the $450-$500 million US range when he "bought" the team in 2003.

Do you understand how buying a company out of bankruptcy works? Read up on it as I don’t have the patience to explain [MOD]. He paid approx 120m for the whole thing, that was the team and the debt at pennies on the dollar.

 

[harrisb]

Things of note Ruddy filed new plans that were instantly met with objections from the sens group saying that they were not aproved.
This changed a 3 phase plan into a 2 phase plan. Seems like they decided the rink and all public spaces were to be built first, leaving EM to fund a rink out of pocket instead of profits. It also opens the door for Ruddy to flog his condos at the other site during this time.
You all sure Ruddy isn't in the wrong here?

You mean the plans that CSMI signed off on? I’m fairly sure a legal signature outweighs the fact that CSMI was not pleased but signed off anyways.

 

[NorthCoast]

What about new ownership trying to recoup some of there 500 million and or pay off any loans they make to acquire the team?
You could end up with >Em revenue and +++ >>>> non hockey related cost.

Okay, that is a very fair point. In some rare cases worse or same management takes over. Otherwise no longstanding franchise would relocate (or city just refuses to find new stadium).

But there are more ownership changes than relocations by far. So most ownership changes must be either same or an improvement. And while it's possible the Devcore stakeholders could finance the whole thing with bad debt...it wouldn't be because they don't have the money to clear some of that debt, as opposed to say a Bryden ala 2003 (and possibly now Melnyk) who could only buy something with debt.

Grass isn't always greener, except when it is

 

[supsens]

You mean the plans that CSMI signed off on? I’m fairly sure a legal signature outweighs the fact that CSMI was not pleased but signed off anyways.

Unsigned at the time