Monday, September 12, 2011
Devils refute bankruptcy report
By Katie Strang
The New Jersey Devils refuted a story in the New York Post claiming that the team is on "the verge of bankruptcy," calling the report "patently untrue."
According to the Post's story, the "attendance-challenged, heavily-indebted team missed its Sept. 1 loan payment, giving its lenders a breakaway chance to push the team into bankruptcy." The story went on to cite a source that claimed the Devils "told their banks to get lost."
"Today's NY Post story is inaccurate. The notions that the Devils are facing bankruptcy or that 'the Devils have told their banks to get lost' are patently untrue," the team said in a statement.
"The Devils value their relationship with their banks and are confident a refinancing will be completed shortly. As stated previously, ownership is close to finalizing an agreement that would lead to a buyout of (minority owner) Brick City's share of the company."
Additionally, a league source told ESPN.com said there are "many inaccuracies" in the article.
"Most significantly, that a bankruptcy filing is either imminent or being threatened" the source said.
The Post wrote that the team's financial difficulties could jeopardize the Prudential Center and that some lenders are already considering selling their stake to other investors. The story also had one source speculating that the team has already been declared bankrupt.
The statement released by the Devils also boasted increased ticket sales and pointed out other factual errors in the Post's story.
"The organization is also pleased to report that new season ticket sales are up 130 percent over last year and last week's on-sale for single game tickets were 260 percent above last year's similar period," the statement said. "Finally, the start of training camp was incorrectly reported in the article as tomorrow (Tuesday). In fact, training camp starts on Friday for the rookies and Saturday for the veterans."
Team president and general manager Lou Lamoriello refused to discuss the organization's financial situation.
Brick City LLC is the legal name for the Devils share owned by Ray Chambers and Mike Gilfillan, his son-in-law. The minority owners of the Devils are finalizing a deal to sell their interest and give managing partner Jeff Vanderbeek some new partners.
Vanderbeek and his partners have been at odds since earlier this year, with Vanderbeek noting they have different visions for the franchise.
Brick City exercised its contractual rights under its partnership agreement with Vanderbeek to cause a sale of the entire team and arena rights to the Prudential Center, subject to certain terms and conditions.
It hired Moag & Co., a Baltimore-based investment bank, to assist in its attempt to sell its share of the team.
Vanderbeek, however, was adamant that he would keep his part of the team.
Katie Strang covers the NHL for ESPNNewYork.com. Information from The Associated Press was used in this report.