The Dallas Stars hockey team intends to sell their team in bankruptcy for a reported $230 million. The proposed bankruptcy sale will include an auction with Canadian businessman Tom Gaglarid as the favored bidder despite the opportunity for other bidders to enter the fray. “With the Stars, I don’t think you’ll see a bidding war,” said Michael Cramer, who was president of the Stars holding company from 1998 to 2004. He said so long as the deal is considered fair by creditors, he doubted there would be any challenge to the proposed sale to Gaglardi.
According to sources close to the deal, the Dallas Stars’ prepackaged bankruptcy has the support of the National Hockey League. And the Stars aren’t the only sports team to face bankruptcy; in fact they are the second hockey team and the fifth sports team to do so in the past five years. Tom Hicks, who purchased the team in the 90’s hasn’t spoken publicly about the proposed bankruptcy of the Dallas Stars, but some note that his company’s financial troubles and its inability to support the hockey team has made a bankruptcy filing necessary.
So what’s next? Despite the reported creditor approval of the Dallas Stars’ prepackaged bankruptcy plan, the team will need to actually file bankruptcy and win the approval of the trustee. While the major lenders support the sale of the team and the proposed terms of that sale, junior creditors might not agree. The bankruptcy trustee is charged with making sure that the bankruptcy plan is fair to all creditors and it’s that value judgment that will determine how quickly this team exits the bankruptcy process.