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William (Boots) Del Biaggio III has had the kind of week you wouldn't wish on a telemarketer.
He has now been served with four lawsuits totalling at least $18-million (U.S.). One lawsuit was filed by a former friend; another filed by the San Jose bank his father founded. Federal authorities are investigating Del Biaggio's alleged financial misconduct and, for added measure, his wife Kristen has filed for legal separation.
And you thought you couldn't wait for the weekend.
But as Del Biaggio teeters on the brink of bankruptcy, it's worth asking: what's going to happen to his 27-per-cent stake in the Nashville Predators? And will this have any adverse affect on a franchise that almost left Nashville last year?
Multiple sources have said the Predators' largely local ownership group is trying to find a buyer for Del Biaggio's share, which is the second largest in the team. The NHL is also said to be helping Freeman and Predators Holdings LLC in their search for a new investor.
Del Biaggio had hoped to buy the Predators outright in a bid to move them to Kansas City, where he had arranged to play out of the new Sprint Center arena. Unable to strike a deal, Del Biaggio decided to buy in for 27 per cent at an estimated cost of $60-million.
To get Del Biaggio's money and close the $193-million transaction with then-owner Craig Leipold, Freeman and his group agreed to some sweetheart terms. Del Biaggio would share in the club's profits but not its losses. Plus, he would not be subjected to any cash calls if the club was in need of an infusion.
The idea was not to bleed Del Biaggio financially but instead allow him to buy out his partners if that's what they wanted.
But no one with the Predators or the NHL was aware of Del Biaggio's financial manoeuvrings and how quickly they would unravel.
Last November, Del Biaggio began securing loans through friends (Canadian Doug Bergeron, who was supposed to buy into the Predators), his father's bank (Heritage Bank) and a third institution (Modern Bank), whose lawsuit states it lent Del Biaggio $10-million to enable him to acquire his piece of the Predators only to allege "the loan — which remains unpaid — [was] procured by fraud."
A fourth lawsuit was filed against Del Biaggio, and his wife, when they secured a $1-million loan from The Private Bank of the Peninsula in Palo Alto, Ca., using their family trust as collateral.
Clearly, the Predators and the NHL need to divest themselves of Del Biaggio and his troubles. Some are speculating Canadian billionaire Jim Balsillie, the co-CEO of BlackBerry-maker Research In Motion, recently made a second offer to purchase the Predators only to be rebuffed by NHL commissioner Gary Bettman. (Bettman was irked last year when Balsillie began taking season-ticket deposits in Hamilton after he struck a purchase agreement with Predators' owner Leipold.) Richard Rodier, Balsillie's lawyer, has hinted the Balsillie camp will soon have something to reveal.
"I think it will become apparent in the next week or so," Rodier told Toronto radio station The Fan, "that the commissioner's view is that there are no circumstances under which he wants Jim Balsillie in the league if there is a scintilla of chance that he might be able to apply for a relocation of the team to Southern Ontario within seven years."
If the Predators' current owners can't find a suitable investor, they could opt to buy out Del Biaggio and add to their share. According to a source, the NHL could also help the owners by "taking it [the 27 per cent] over."
Either way, it's unlikely the Predators will be in the same near-death throes as they were last summer. The concern, however, is that Del Biaggio's collapse has cast a negative light on the franchise as it tries to add corporate backers and season-ticket holders.
The NHL has declined comment on the situation.
