For a precise and professional description of what occurred in Judge Jeffery Deller’s courtroom today, read the Trib’s Brian Bowling’s story.
However, if you want a longer and possibly incorrect recap of event from someone vastly unqualified to observe and report on federal bankruptcy hearings, please keep reading.
9:50AM – Tuffy, Kutney, and attorneys in attendance. Tuffy tells me he’s disappointed in the lack of smoke for today. Everyone upbeat, but not ready to celebrate yet.
54 floors above the city is an awesome view. There is picturesque, unobstructed view of Highmark Stadium from the court lobby. Really amazing, but slightly ominous view to have before going into court.
Like a middle school dance, opposing sides are in opposite ends of the lobby, shooting glances towards each other but won’t make eye contact. Small talk about last night’s Bengals-Browns game is not cutting the tension.
Every guy, except me and Tuffy, is wearing a tie. Only guy not wearing a collared shirt… Tuffy. He opts for a plain sweater and brown leather jacket. Tuffy gives no bothers about conventional court attire.
Is the team attorney, John Steiner, is trying to talk Wilke off the ledge? Seems like Wilke is proposing a last-ditch tactic. Lawyer tells him, “Sorry, but this is probably over.”
10:20AM – Tuffy asks me if I took notes about the Wilke conversation. Tuffy says he thinks it just hit Wilke that this whole ordeal is over.
10:25AM – Hounds case is up next. We all shuffle into court. The court consists of Judge Deller’s raised bench on the far wall, with three aides seated in front of Judge Deller with their computers and paper in tables in front of them. there are two tables facing the bench for attorneys with a central podium to address the court. The gallery consists of two sets of four pews. About 60% of the available seating is being used for this case. Wike and his attorney walk in about five minutes after we’ve all entered. He takes the pew in front of me. The current case is still being discussed. We wait.
10:42AM – And begin…
Attorneys and representative are present from (at least) Riverhounds Event Center, Riverhounds Acquisition Group, First National Band, Urban Development Group, State Square Gaming Group, Shallenberger Investments, and the Wilke party.
The Riverhounds Event Center group is being discussed first. Steiner is the main speaker on all things today.He says that he has resolved all objections from various other groups and creditors including Station Square, Wilke, and others. The majority modification from the plan that was originally proposed is that First National Bank will have their debt obligations paid in full by December 30. They will be paid by Shallenberger Investments and SI will assume all of FNB’s financial obligations. There is also an issue with the ground lease. It appears the the terms of the reworked lease have been agreed to, but the paperwork has no yet been signed. This presents a slight issue that this paperwork should be finalized before the plan is confirmed, but all parties involved would like to see the plan confirmed today. Judge Deller says they can come back this issue later.
11:11AM – Wilke’s attorney wants to get some issues put on the record. While they have dropped their formal objections to the plan after some negotiating, he would still prefer to have some issues placed on the record. Interestingly enough, Wilke feels that the Riverhounds Events Center (the stadium) is the more viable company in the long term, not the team/academy. It sounds like the team/Shallenberger haved made some concessions to the Wilke party to get them to withdraw their objections. I couldn’t follow along well enough to know what those concessions, if any, were.
11:21AM – Steiner begins going through the list of voting creditors, showing they have a majority acceptance of the plan.
11:25AM – Steiner reading off revenue projections, similar to figured filled previously. Main revenue of the stadium is expected to be sponsorships. Main expense will be payroll. Shallenberger will cover all loses until stadium breaks even or turns apart. Projections forecast that the stadium will become profitable three years after emerging from bankruptcy. A representative from Shallenberger Investments confirms that Tuffy has and is prepared to use the resources to cover both REC and RAG losses, up to $3 million, which is more than enough to cover expected losses over the next few years.
11:38AM – Steiner states that Kutney and Tuffy are prepared, if asked, to testify that they are ready to move this company forward. Furthermore, Tuffy has (probably) lined up a bunch of sponsors that will be ready to sign once the team is out of bankruptcy.
11:42AM – Judge Deller proposes a way to confirm the plan pending signing of the ground lease plans that have already been drawn up, as no one is foreseeing there being an issue. If the plan is confirmed, the lease agreement will be made effective yesterday so that there are no language issues to the confirmation plan. There is no objections to this proposal.
11:53AM – Steiner states that because Tuffy will pay off the FNB portion of the debt by December 30, the plan, if confirmed, will not take immediate effected, but rather on December 30.
11:56AM – Steiner finalizes his case, asks Judge Deller for confirmation.
11:57AM – Judge Deller asks if there are any objections. None proposed.
11:57:23AM – Judge Deller accepts and confirms the reorganization plan of Riverhounds Event Center.
11:58AM – Now for Riverhounds Acquisition Group
12:02PM – Wilke’s attorney pulls his client into the hallway. Steiner begins his statements about RAG’s debts, revenues, and creditors.
12:05PM- Judge Deller asks someone to fetch Wilke’s attorney. We wait. Awkward silence. Wilke’s attorney reappears, apologizes.
12:06PM – Judge Deller, “I’m sorry, Mr. Lampert, this case isn’t over.” Your Honor, not amused, at all.
12:09PM – Summarizing the balloting of RAG creditors. Majority of parties have accepted the plan.
12:11PM – Summary of financial forecast. Main source of revenue is the academy. Main sources of information used to forecast academy revenue was Kutney. Steiner admits that ticket revenue is tied to team performance. Team is not expected to turn a profit for first two years out of bankruptcy. Again, Tuffy is prepared to cover loses.
12:21PM – Franchise rights valued at $560,000 if sold at liquidation. Total liquidation value of all of RAG’s property is $819,272.
12:25PM – Steiner states that Kutney has been working ‘to the bone’ to increase viability of the team. Kutney has worked agreements with players and coaches, with the bankruptcy keeping those agreements on hold.
12:30PM – It is expected that current management (i.e. Kutney) will stay in place going forward.
12:31PM – Steiner asks Judge Deller to confirm the RAG reorganization plan. Judge Deller has some questions related to specific language and issues related to the previously mentioned unsigned ground lease.
12:33:58PM – Judge Keller confirms the Riverhound Acquisition Group’s reorganization plan.
12:37PM – I get my phone back and tweet the good news. Outside the US Steel Building, Tuffy tells me, “It’s done. We’re off and running.”
#Unleash the 2015 season
