Report: Devils owner close to deal with lenders
According to the New York Post, Devils owner Jeff Vanderbeek is on the verge of reaching a deal with lenders that would allow him to retain control of the club for at least two more years.
The proposed deal would buy Vanderbeek — who has been trying to scrounge up cash to pay off overdue loans — another two years to either refinance the team’s debt or sell the club, sources said.
The deal calls for combining the team’s debt with separate loans against Devils Arena Entertainment, which collects concession revenue from Prudential Center events, into a single $160 million loan.
The former Lehman executive dug into his own pocket to inject fresh cash into the team and raised enough from new investors to pay off a few lenders who do not want to participate in the proposed restructuring, sources said.
The Post reports the deal could still collapse, which could force the Devils into bankruptcy.
However, The Record explains why bankruptcy is unlikely for now:
A source said Vanderbeek has already worked the debt down to less than $35 million and raised roughly half of that remaining figure, leaving him needing about $18 million more to fully cover what the team owes the banks. If the lenders were to push the team into bankruptcy, they would likely recover much less than that. That gives them every reason to give Vanderbeek the time he needs to raise the rest of the money the team owes.
Obviously the lenders will be watching the CBA negotiations closely. According to Forbes, New Jersey is a money-losing franchise, so a lockout shouldn’t hurt the bottom line too badly. In fact, it may help it. And if the owners can score a better deal from the players, Vanderbeek’s prospects of repaying the debt will improve.