Life never changes for Gary Bettman and the NHL. Just when the commissioner has one fire (the Dallas Stars) almost under control, another one (the New Jersey Devils) erupts.
Either Wednesday or Thursday, according to an investment banking source, the Stars will file for bankruptcy in a Delaware court, which will pave the way for Vancouver businessman Tom Gaglardi to buy the team for an estimated $230-million (U.S.).
Officially, Gaglardi's offer is considered a stalking-horse bid by the bankruptcy court, one designed to attract higher bids, but those close to the deal do not expect a competing bid from any of the local groups who have been kicking the tires on the team for almost two years.
If the Stars' creditors approve the plan and Mark Cuban, the owner of the NBA's Dallas Mavericks, does not make a surprise bid, Gaglardi will achieve his dream of being an NHL owner. He will get the Stars and 50 per cent of the American Airlines Center. (Cuban owns the other 50 per cent of the arena, which is why some insiders think he might make a bid through the courts.)
Gaglardi could not be reached for comment Tuesday.
Another franchise sale may be close at hand, according to Robert Caporale, chairman of Game Plan LLC. Caporale is the investment banker in charge of selling the St. Louis Blues, and he is hopeful a deal will be ready for the approval of the NHL board of governors by the end of the month.
Caporale declined to identify the prospective buyer, but the most recent contenders were Chicago businessman Matthew Hulsizer and Blues minority owner Tom Stillman.
A new NHL crisis emerged this week, when it became known the Devils missed a payment Sept. 1 on a $100-million loan with CIT Investment Banking Services.
By Tuesday, the Devils made it known that co-owner Jeff Vanderbeek plans to buy out fellow owners Ray Chambers and his son-in-law, Mike Gilfillan, as part of a refinancing plan. The team also said it received an extension on the bank loan.
Chambers and Gilfillan own 47 per cent of the Devils and their operating company, Devils Arena Entertainment, through a company called Brick City LLC. They have been trying to sell their stake for almost a year. Vanderbeek also has 47 per cent of the team, while Peter Simon owns 6 per cent.
While Chambers was said to be seeking $160-million for the Brick City shares, a banking source was skeptical anyone would be willing to pay that much. The source was also dubious about Vanderbeek's chances of being able to finance a purchase of Brick City's share.
It is possible Vanderbeek could get the additional 47 per cent for little, if any, cash if he agrees to assume all of the bank debt. In addition to the $100-million loan, Devils Arena Entertainment has another loan for almost $180-million, which means the team's total debt could be more than the franchise value.
But if Chambers and Gilfillan are no longer responsible for the bank debt, it might be enough for them to walk away with nothing, since it's assumed Chambers is the one covering the Devils' annual losses.
If so the question is who would take the chance of lending Vanderbeek enough money to pull this off. Vanderbeek could not be reached Tuesday for comment.
In any event, the Devils will not be pushed into bankruptcy during the coming NHL season because of a "stand-still" clause in their lending agreement.
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. If the 180 days end during the NHL season, as they would in this case, the banks are bound to "stand still" until the day after the last game of the Stanley Cup playoffs.
Not only does this spare the NHL embarrassment during the season, it gives the team owner and league commissioner time to find new financing and work out an agreement with the lenders.
Meanwhile, a report out of Phoenix said talks with former San Jose Sharks executive Greg Jamison about buying the Coyotes are progressing, but it could not be confirmed.