Ottawa Senators file for bankruptcy

[Dooby]

Team able to continue playing this season

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Associated Press

OTTAWA -- The Ottawa Senators filed for bankruptcy Thursday, seeking protection from creditors while the first-place team reorganizes its troubled finances.


The filing under Canada's federal Companies' Creditors Arrangement Act allows the team to continue playing this season while it looks to restructure its debts, negotiate a sale of the franchise or bring in other investors, under supervision of a bankruptcy court judge.


Despite their financial problems, the Senators are tied with Vancouver for the most victories in the league this season with 25. The Senators lead the Northwest Division with 56 points, and are tied with Detroit for the second place overall behind Dallas.


The club did not pay its players on New Year's Day after a refinancing deal involving Canadian and U.S. banks fell through. That deal would have injected $42 million to cover operating expenses -- including the missed salaries -- and payments to keep its loans current.


NHL Commissioner Gary Bettman has held talks with all parties and expects a new financing arrangement soon.


"We have been working with the Club and the interested parties to finalize the Club's short-term financing arrangements and consider (Thursday's) filing a necessary and constructive step in that process,'' Bettman said in a statement. "Now, we can focus on the Club's long-term needs.''


The team called a news conference for Thursday afternoon to discuss the filing.


"This franchise is recognized as one of the best managed in the League, and that management will continue to do everything possible to deliver quality hockey to fans and maintain maximum value of the franchise throughout this process,'' Sens owner Rod Bryden said in a statement.

"Players have been particularly supportive during the past ten days, when the unexpected failure of the transaction scheduled to close prior to year-end left the club without cash to pay their salaries. This quality and commitment from management and players assures our community and creditors of maximum value.


"It is my hope that I will be part of a solution to the current issues that will preserve that value for Ottawa.''


The Senators owe $104 million to major creditors, including Canadian Imperial Bank of Commerce, FleetBoston Financial Corp., the NHL and brokerage J.P. Morgan.


The team also owes $136 million for its home arena, the Corel Centre, which is owned by the Bryden-controlled Palladium Corp. but effectively under the financial control of Covanta Energy Corp., a bankrupt U.S. firm owed most of the money.


The Pittsburgh Penguins and the Los Angeles Kings are the only other franchises in the four major pro sports leagues to file for federal bankruptcy protection in the last 29 years. Pittsburgh did it in 1974 and 1998, with the second filing leading to Mario Lemieux's taking over the club. Los Angeles filed for bankruptcy in 1995 to allow the purchase of the team to proceed.

[Murphy3]

you think baseball has problems?..just wait to see how bad the labor mess will be with the NHL soon enough

[Dooby]

Of course, the dirty little secret is that several other sports teams (not just NHL) have effectively been foreclosed upon in the recent years. Not to name names, but why would Tom Hicks want to buy a hockey team?

[Drbio]

The sad thing is that they are in first freaking place. Oh well....hockey is going downhill slowly anyways. Too bad really....I've watched hockey since 1976 when dad took me to my first Albequerque Chapparals hockey game. They were a AAA farm club of the Boston Bruins back then. Fights a plenty!