The next step in the Dallas Stars sale process is complete. The team announced on Thursday that they have filed a prepackaged chapter 11 plan in United States Bankruptcy Court to aid in the team’s sale. Lenders have worked with the team to put together the plan that would sell the team to Vancouver businessman Tom Gaglardi for an estimated $230 million—yet the sale is still subject to higher bids within the context of the bankruptcy proceedings.
Straight from the Dallas Stars’ press release:
To facilitate the sale, Dallas Stars, L.P. has commenced a voluntary chapter 11 bankruptcy case in the United States Bankruptcy Court for the District of Delaware in Wilmington, including the filing of a “prepackaged” chapter 11 plan. The chapter 11 process has the support of the National Hockey League and the Dallas Stars’ lenders, who voted to accept the prepackaged plan prior to filing. The prepackaged plan provides for a court-supervised auction of the Dallas Stars Club and other hockey-related assets. The purpose of the sale is to allow for a smooth transition in ownership, while ensuring that the Dallas Stars continue to play at the American Airlines Center in Dallas. The Plan provides that the Dallas Stars will pay and perform all of its obligations to its fans, players, employees, and vendors.”
It’s important to note that this is merely a procedural step in this particular sale. People will see the word “bankruptcy” and automatically assume that the Stars are yet another NHL team that is in financial dire straits. That’s not the case. In the Stars circumstance, there are various lenders who are owed debts that were incurred under the previous regime. In order to handle the debts within the context of the settlement, a prepackaged plan in Bankruptcy court is a viable solution to address all necessary parties. Still, there will be those outside the hockey world who will see “bankruptcy” and make the leap toward financial instability within the sport. That may or may not be true in other markets—but not in Dallas.
The news comes as the Dallas Stars’ players and coaches look to start the 2011-12 season on the right foot. Fortunately, the team’s sale should not affect the players on the ice or the inhibit GM Joe Nieuwendyk from doing his job. President Tony Tavares explained that it will be business as usual for the players starting training camp this week:
“This is a significant step toward completing the transition in ownership. We are pleased that our lenders have shown substantial support for the plan and the sale process, but the Dallas Stars are focused on one thing: hockey. The players and coaches begin Training Camp on Friday and we are all excited to start the new season.”
This season is shaping up to be a year of renewal for the Stars. Between the sale and a new coaching staff led by Glen Gulutzan, the team will look to create a new identity and get back to the playoffs for the first time in three seasons. A young coach leading the young players on the ice will help—but solidifying stable ownership will be the most important thing the team accomplishes this season.
Maybe the Stars will be able to start spending money once again? We should find out in late November.