Friday, November 18, 2011
Dallas Stars sale: A timeline
By Mark Stepneski
Here’s a look at some key moments in the sale of the Dallas Stars.
2005: The Stars lose $70 million in anticipated revenue due to the NHL losing the 2004-05 season due to the lockout.
Early 2009: Hicks Sports Group determines current cash flow shortfalls and those projected for 2010, 2011 and beyond require reduction in all expense categories.
March 31, 2009: HSG fails to make an interest payment on loans totaling more than $525 million, thus defaulting on the loans.
May 12, 2009: The Stars start receiving funds from an interest reserve accounts established as part of credit agreements to help fund operations. From May 2009 to January 2010, the Stars would receive $19 million from the interest reserve accounts to help fund operations.
November 9, 2009: Stars owner Tom Hicks, the NHL and the Dallas Stars enter into a letter agreement under which the NHL would oversee the sale of the Dallas Stars and its share of the American Airlines Center. The agreement provides for an NHL Monitor to oversee the operations of the team and the sale process.
January 2010: The interest reserve account is depleted. Stars begin talks with the NHL and lenders to secure additional funding.
February 1, 2010: Stars execute promissory note with CFV Lender, an NHL affiliate, for $19 million. With the Stars entering the CFV debt agreement, the NHL obtains exclusive right to control the operations of the team, including the authority to "cause a sale of the Dallas Stars." HSG no longer has the ability to control the Stars or its operations.
February 4, 2010: HSG and the Dallas Stars retain GSP Securities LLC to provide financial advice and assistance in connection with the sale of the Stars, its share of the American Airlines Center and related hockey assets.
Spring 2010: HSG, Stars and lenders begin process of looking at prospective buyers and investors. At least eight of the prospective buyers signed confidentiality agreements and were given access to an electronic dataroom to study the Stars' situation.
January 14, 2011: Stars secure an additional $24.6 million of borrowing capacity under the CFV debt agreement to help with cash flow needs for the remainder of the 2010-11 season.
April 13, 2011: The Stars and Vancouver businessman Tom Gaglardi, who is determined to have the best offer among prospective buyers, sign a Memorandum of Understanding concerning the sale of the team. Gaglardi receives "certain limited exclusivity rights" with respect to the proposed sale. The two sides begin negotiating and drafting documents in preparation for the sale of the Stars.
May 2011: Exclusivity rights end. Lenders continue to market team and engage in negotiations with potential buyers.
September 1, 2011: The Stars and Gaglardi complete negotiations on a Stalking Horse Purchase Agreement for the Dallas Stars, its share of the American Airlines Center and its hockey assets.
September 15, 2011: The Stars file for bankruptcy in a Delaware court and announce an agreement to sell the team to Gaglardi pending an auction and court approval. Court documents state the team has lost $91.5 million over the past three years and are expected to lose in excess of $31 million in 2011-12 before costs related to the sale.
September 19, 2011: The court in Delaware approves motions that keep the Stars running as a business while the team is in the bankruptcy process.
September 22, 2011: The court approves bidding procedures for the team, setting an auction date of November 21 and November 23 for a combined hearing to approve the sale and the team’s prepackaged bankruptcy plan. Competing bids are due October 22.
October 21, 2011: Former Texas Rangers CEO Chuck Greenberg, considered the most likely person to possibly bid on the Stars and compete with Gaglardi in an auction for the club, announces he will not bid.
October 24, 2011: It becomes official that no other bidders have met a deadline to submit offers for the Stars, leaving Gaglardi’s stalking horse bid as the only bid.
November 9, 2011: The court approves moving the combined hearing to approve the sale of the Stars from November 18 to November 23.
November 16, 2011: News breaks that Gaglardi has decided to bring back former Stars president Jim Lites as president of the club and that the NHL Board of Governors has approved the sale of the team to Gaglardi.
November 18: The court in Delaware approves the sale of the team of the team to Gaglardi and confirms the Stars’ prepackaged bankruptcy plan. The sale is immediately closed. Gaglardi officially becomes the new owner of the Dallas Stars.