Dallas Stars Bankruptcy
The NHL hockey team the Dallas Stars has won court approval for its bankruptcy reorganization. The team filed for bankruptcy protection September 15 this year. The Dallas Stars will be sold for $265 million to Vancouver businessman Tom Gaglardi. The sale of the team will eliminate hundreds of millions of dollars of unpaid debts.
U.S. Bankruptcy Judge Peter Walsh approved the bankruptcy reorganization plan at a hearing on Friday. Gaglardi ended up being the only bidder in this court-supervised auction. Tom Gaglardi, 43, is president of his family’s business Northland Properties Corp who has properties that include Sandman Hotels, Inns & Suites; as well as more than 100 restaurants including Denny’s and Moxie’s. They also own the Kamloops Blazers junior hockey team in British Columbia.
The National Hockey League has approved the sale of the team to Gaglardi, who has agreed to pay off approximately $50 million the team owed to an NHL affiliate. He has also agreed to take out $100 million in new financing to pay the club’s senior lenders, who were owed $250.9 million as of July 31. Junior lenders owed $146.2 will receive up to $25,000 of their legal fees paid and will share in $500,000 of the recovery that is designated for senior lenders, under the plan. Gaglardi will be assuming all of the Dallas Stars’ liabilities, to ensure that vendors and service providers will be paid. Jim Rossiter, a partner at Baker & McKenzie, which represents Gaglardi stated a formal announcement of the sale of the Dallas Stars to Gaglardi will be made on Monday.
“Tom is the real deal.” “You have an owner who is engaged (and) loves the game, and he is in the hospitality business. He has roots in Texas, and he will not move the team. Dallas is a wonderful market and Tom is the right owner.” Rossiter said in an interview.
Mr. Gaglardi’s purchase of the team played a key role in Chapter 11 restructuring plan, which received only one “no” vote. The bankruptcy plan was negotiated prior to the September 15 filing. The plan had only a few minor objections, which were resolved before the bankruptcy hearing. Overall, the sale and court proceedings ran smoothly.
“No glitches. It’s almost boring,” commented Judge Peter Walsh at the court session where he approved the Chapter 11 plan that cements Mr. Gaglardi’s acquisition.
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