A deal struck outside a Rochester courtroom on Sept 27 likely saved the season for the Elmira Jackals hockey team. The season, scheduled to begin October 12, was in jeopardy due to an ongoing dispute over First Arena, where the Jackals play, and a Chapter 11bankruptcy proceeding filed by the arena’s former operator. The interim agreement reinstates Elmira Downtown Arena LLC (EDA) as the arena operator and preserves hockey in Elmira.
In July, First Arena’s owner terminated its agreement with EDA, which is controlled by the same Michigan businessman who owns the Jackals. This led to a legal proceeding to determine whether the Jackals could play in the arena this season. EDA filed for Chapter 11 bankruptcy in August, automatically halting the other legal proceeding. Elm Arena LLC, which has taken over the arena’s mortgage and is under contract to become the new owner, then sought payments from EDA under the bankruptcy rules for protection against the arena’s depreciation. If no agreement was reached, the new owner was prepared to ask the bankruptcy judge to keep EDA and the Jackals out.
Under the agreement, EDA will make $18,000 monthly payments to Elm Arena, maintain adequate insurance on the facility, and properly maintain the building and its equipment. In return, Elmira will enjoy hockey this fall and EDA will be able to use the money it makes from Jackals’ games.
A business bankruptcy can have far-reaching effects on a community. As this case demonstrates, the potential negative effects can be minimized. An experienced Chapter 11 bankruptcy attorney can help a troubled business navigate complex negotiations with creditors and continue operations during debt reorganization.
Source: Pressconnects.com, “Deal opens First Arena to Elmira Jackals,” Jason Whong, Sept. 27, 2012by