Owners of cash-strapped Devils reach deal
New Jersey Devils principal owner Jeff Vanderbeek has reached an agreement to purchase co-owner Ray Chambers' 47 percent stake in the franchise, the New York Post reported Tuesday.
The agreement is a small step toward financial recovery for the Devils, who missed a $100 million principal loan payment Sept. 1.
The deal for Chambers' stake, which had been on the market for more than eight months, helps steady the Devils' ownership situation. But the heavily-indebted NHL team must still work to restructure its debt, and its lenders have not agreed to refinance the Devils' loans which are in default, a source told the Post.
The Devils did not respond to requests for comment Tuesday.
According to the Post, the banks can put the team in default but cannot force a sale or repossess the club for more than 180 days after informing the NHL of the default.
CIT Group is the lead lender on the roughly $100 million, five-year loan, and has been getting out of sports lending, sources said.
The attendance-challenged team's financial hardships could also affect Newark's four-year-old Prudential Center, the Devils' home arena. Team-owned Devils Arena Entertainment operates the $375 million building and guarantees the Devils' loans and, therefore, is in danger of also going bankrupt.
On Monday the Devils said the notion that the team is facing bankruptcy is untrue.