Preds given time to walk Boots out
By: By TERESA M. WALKER, AP Sports Writer
NASHVILLE (AP) — The Metro Nashville Sports Authority is giving the owners of the NHL’s Nashville Predators time to deal with the bankruptcy filings of a minority partner before taking any action against the team.
The FBI is investigating allegations that William “Boots” Del Biaggio III obtained millions of dollars in loans by fraud.
Del Biaggio filed for Chapter 11 bankruptcy last week in California, and the FBI served subpoenas to the Predators, the sports authority and the Metro Council to preserve records involving the businessman.
“We will cooperate fully with FBI,” David Freeman, the lead partner in the Predators’ ownership, said Friday in a statement to the authority. “I can assure you that the allegations against Mr. Del Biaggio are as surprising to us as they are to you.”
Under the lease for the arena where the Predators play, the team’s owners have 60 days from Del Biaggio’s June 6 bankruptcy filing to find a substitute investor to replace the approximately $9.8 million he pledged to the authority as a guarantee for any damages.
Attorney Larry Thrailkill told authority members they could immediately rule Del Biaggio in default of the city’s lease with the Predators because it appears he lied to the authority about his assets.
But Thrailkill advised them to give the other owners the time to remedy the situation.
“It appears that a number of individuals … our local investor group, the sports authority and the Metropolitan Council have been the victims collectively, along with six or eight financial institutions in California, of a fraudulent scheme or activity by Mr. Del Biaggio,” Thrailkill said.
The attorney said he knows people want to know who is to blame for the sports authority finding itself in this situation.
His answer? Del Biaggio.
Thrailkill said the NHL and others had investigated Del Biaggio’s financial records and holdings when he became a co-owner of the team, and found nothing troublesome.
“We are simply victims of a fraud scheme actively conceived by Mr. Del Biaggio, and assisted, according to the pleadings, by an insider …,” Thrailkill said. “It would be difficult, if not impossible to find that.”
A federal bankruptcy judge approved a request last week to appoint a trustee to Del Biaggio’s case.
Both Del Biaggio and one of his creditors asked that the trustee be the same man who helped dispose of Bruce McNall’s share of the Los Angeles Kings during his past bankruptcy filing in 1994.
Freeman asked the authority members to wait until that trustee is appointed and the Predators’ owners have had a chance to meet with him on how to protect the team during the bankruptcy proceedings.
His group bought the team for $193 million in a deal that closed last December.
“Our goals this summer remain the same as they were last summer: To enhance the city of Nashville and protect Nashville’s hockey team from any and all that have motives inconsistent with the best interests of the city of Nashville and our quality of life,” Freeman said.
Freeman declined questions from reporters after the meeting.
Del Biaggio put $25 million into a company that bought into the Predators’ ownership group, according to Thrailkill. Plus, Del Biaggio guaranteed about $9.8 million to the sports authority as lease protection in the form of liquidated damages if the Predators left Nashville.
Thrailkill said local owners guranteed more than $20 million to the sports authority.
Sports authority chairman Kevin P. Lavender said an FBI subpoena of the authority asked that documents, records or hard drives that involved Del Biaggio be preserved. He predicted the authority would meet again within the month to hear updates.
“We don’t lose anything by waiting 60 days,” Lavender said.