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Thread: NHL: Senators file for bankruptcy

  1. #1
    The race is back! John's Avatar
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    NHL: Senators file for bankruptcy

    Senators file for bankruptcy protection from creditors

    Posted: Thursday January 09, 2003 3:35 PM
    Updated: Thursday January 09, 2003 6:35 PM

    Martin Havlat and Daniel Alfredsson have continued to play well despite the team's off-ice distractions. AP

    OTTAWA (AP) -- The Ottawa Senators filed for bankruptcy Thursday, seeking protection from creditors while they look for a buyer.

    The filing under Canada's federal Companies' Creditors Arrangement Act allows the first-place team to keep playing during any negotiations on a sale, owner Rod Bryden told a news conference.

    He said he was working with a potential partner on a bid to buy the team and the Corel Centre where it plays.

    The filing gives Bryden until Jan. 14 to submit a bid, he said. If it is rejected or he fails to do so, a broader marketing plan will seek other buyers.

    Despite their financial woes, the Senators are tied with Vancouver for the most victories in the NHL this season with 25. The Senators lead the Northwest Division with 56 points, and are tied with Detroit for second place overall, behind Dallas.

    Statement of NHLPA executive director Bob Goodenow
    Today's bankruptcy filing was expected and is another step in the process of restructuring the Senators' finances. It is indeed unfortunate that both the club and the arena have been undercapitalized since their inception. Over the past few years, the club has been successful on the ice and the Ottawa fans and business community have done their best to support the team. However, the excessive debt load when combined with the weak Canadian dollar, have dictated this outcome.
    The club did not pay its players on New Year's Day after a refinancing deal involving Canadian and U.S. banks fell through. That deal would have injected $42 million to cover operating expenses -- including the missed salaries -- and payments to keep its loans current.

    Bryden said the filing provides $8.8 million in emergency funding from creditors to "preserve the value of the product" for its eventual sale. The money would allow the team to pay players, perhaps as soon as Friday, along with other expenses for the next 30 days, he said.

    Much of the Senators' financial problem is caused by the weakness of the Canadian dollar, worth about 65 cents in U.S. currency. Like other Canadian teams, the Senators take in revenue in Canadian dollars but pay salaries in U.S. dollars. The team also has struggled for years with heavy debt, and it doesn't have the advantage of being in a bigger market, like Toronto.

    NHL owners are expected to use such financial difficulties as bargaining leverage when the current contract with players expires in 2004.

    Bob Goodenow, executive director of the NHL Players Association, said in a statement that Ottawa's bankruptcy filing resulted mostly from the franchise's excessive debt burden and the weak Canadian dollar.

    The Pittsburgh Penguins and the Los Angeles Kings are the only other franchises in the four major pro sports leagues to file for federal bankruptcy protection in the last 29 years. Pittsburgh did it in 1974 and 1998, with the second filing leading to Mario Lemieux's taking over the club. Los Angeles filed for bankruptcy in 1995 to allow the purchase of the team to proceed.

    Statement of NHL commissioner Gary Berrman
    We have been working with the Club and the interested parties to finalize the Club's short-term financing arrangements and consider today's filing a necessary and constructive step in that process. Now, we can focus on the Club's long-term needs.
    NHL Commissioner Gary Bettman has held talks with all parties in Ottawa and expects a new financing arrangement soon. Bettman said the league considered the filing "a necessary and constructive step" toward finalizing short-term financing arrangements.

    "Now, we can focus on the club's long-term needs," Bettman said in a statement.

    Bryden praised the players for being supportive and told Ottawa residents they must fill the Corel Centre for any potential owner to consider keeping the team there.

    The Senators rank 16th in the 30-team league this season with average attendance of 16,355 at the 18,500-seat arena.

    "Now more than ever, support of the community will determine the future of the franchise," he said. "The franchise will have a hugely successful future. The support of the community will determine where that future unfolds."

    The Senators owe $104 million to major creditors, including Canadian Imperial Bank of Commerce, FleetBoston Financial Corp., the NHL and brokerage J.P. Morgan.

    The team also owes $136 million for the Corel Centre, which is owned by the Bryden-controlled Palladium Corp. but effectively under the financial control of Covanta Energy Corp., a bankrupt U.S. firm owed most of the money.

    Bryden said the sale of the team and Corel Centre would recover whatever money the creditors could get for that debt, and all would suffer losses. The new owner, whether himself or others, would start virtually debt-free, he said.

    Despite reports the team also would seek bankruptcy protection in the United States, Bryden said that isn't necessary because all assets are Canadian.

  2. #2
    eny
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    I want everyone to dig the pennies out of their pockets and chip in together so that Ducky, Miss F , Wayner and I can buy the franchise. We get a really good arena in the deal without a bad seat in the house.
    Fort members can come anytime and see whoever is entertaining there free. Get to sit with the PM of Canada and have all the beer and poutine you want.Plus you get to take the Stanley cup home for a day when they win ( the Sens are #1 right now)Won't your neighbours be impressed!

    Seriously, if there ever was a case for deficit financing coming back to bite you, this is it. They had the chance to award a team at that time to Hamilton or Ottawa. Sentimentality won out and Ottawa was chosen, only no one had the money. It was all borrowed.Hamilton had cash in hand as it was backed by Tim Hortons.( Tim Hortons provides essential parts of the Canadian diet ,coffee and donuts, so lots of bucks )
    Paul Allen has stated many times he wants an NHL team, so look for the Seattle Senators very soon.

  3. #3
    Starbucks is your friend Bill's Avatar
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    Meanwhile, Paul Allen waits to buy his team for Portland...

    I don't know squat about hockey, but I used to make the drive up from San Diego to watch the Kings play when Gretzky was there, and I know that hockey in person is unbelievable.

    It is only a matter of time before Allen has a team. The last time the Pengs were on the brink, and the ownership group asked for a demonstration of assets already on hand from any interested buyer, Paul wire transferred $80 Million in cash to a Pittsburgh bank overnight, and it was only Lemeiux who kept us from getting a team then.

    Portland gets 5-10K a night in attendance for minor league hockey... the place will be packed for NHL.
    "George Oscar Bluth II, aka GOB, featured magician in the best selling videotape, "Girls With Low Self Esteem" invites you to enter his world.
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    Starbucks is your friend Bill's Avatar
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    Originally posted by enygma
    Paul Allen has stated many times he wants an NHL team, so look for the Seattle Senators very soon.
    Eny,

    He'll buy it for Portland. He owns the arena outright here, and it was built from the ground up for NBA/NHL dual use, including room for a different set of luxury suites for the NHL.
    "George Oscar Bluth II, aka GOB, featured magician in the best selling videotape, "Girls With Low Self Esteem" invites you to enter his world.
    -- Arrested Development, Season III

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    eny
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    Someone like that deserves the team!I guess I thought PA was in Seattle. Portland Pirates or something Then You can become as obsessed as we are.
    Thrashers,Ducks,Stars,and if they can't get the financing going the Sabres, are all ready for a new Owner.
    I always said usually only people with snow can relate to hockey.

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    Evil Slash Crazy Miss Filangi's Avatar
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    I will be majorly pissed if the franchise moves south.
    If you go through a lot of hammers each month, I don't think it necessarily means you're a hard worker.
    It may just mean that you have a lot to learn about proper hammer maintenance.


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    On ice duckgirl's Avatar
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    I will be too. No more American teams. Seriously. They have too many. We have... not enough.

    Plus, I just bought a new Ikea table and there's a couple bits left over. I need to buy the Sens so one of the Swedes can come and fix it for me. And then we can test it's, uh, durability.

    I really hope they don't go south but if Bryden can't find a partner I think they will. The dude who bought the Nords and moved them to Colorado wants to buy the Corel centre. Oooh. Ottawa Avalanche? Um. No. Yeah. This sucks, but it'll get worked out.

  8. #8
    eny
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    Ottawa Avalanche ? Uh ok ! I can drive and see Peter and Joe..

  9. #9
    Starbucks is your friend Bill's Avatar
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    I doubt that Canada itself will allow another team to leave. Most of us in Portland have our eyes on the hapless Buffalo Sabres.

    Baseball wise though, you will lose les Expos to either us, or Northern Virginia... too bad their management was grossly incompetent at retaining talent, because Vlad Guerrero may be the best hitter in baseball not named Bonds.
    "George Oscar Bluth II, aka GOB, featured magician in the best selling videotape, "Girls With Low Self Esteem" invites you to enter his world.
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  10. #10
    On ice duckgirl's Avatar
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    Yeah... but who cares about baseball?

    I also find it hard to believe that another franchise will move. Just can't see it happening.

    Hands of Peter & Joe, eny! Well... ok... you can have them for a while...

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