Hockey is getting ready to freeze out New Jersey Devils owner Jeff Vanderbeek. NHL Commissioner Gary Bettman is preparing to take control of the money-losing hockey franchise in the event Vanderbeek fails to refinance the Devils' debt before a looming Aug. 14 deadline.
NHL Commissioner Gary Bettman is preparing to take control of the money-losing hockey franchise in the event Vanderbeek fails to refinance the Devils' debt before a looming Aug. 14 deadline.
In recent days, the commissioner's office has told potential suitors to be ready in case he moves on the team and pushes Vanderbeek aside, a source close to the situation said.
Vanderbeek is near a deal to sell a majority stake to a mystery investor, which would allow him to keep control of the Eastern Conference champions, one source said. The proceeds from a sale would be used to repay lenders much of the $77 million in past-due debt.
But while Bettman has said publicly that he expects the Devils' financial situation to be resolved soon, his behind-the-scenes moves suggest he's far from confident that a deal will get done.
His skepticism shouldn't come as a surprise. Since the Devils missed a principal payment in September, Vanderbeek has said several times he was close to a solution to the team's debt woes, only to come up short.
When the team made it to the Stanley Cup finals this spring, the team's lenders agreed to extend the deadline for when they could put the team in default from early July to August, sources said.
Asked about the Devils before Game 1 of the finals last month, Bettman said Vanderbeek "is working to both refinance the debt on the club and equity-raise, and he appears to be fairly confident that he can pull this off in the next few weeks."
Bettman added, "Since I've been in touch with the banks on a regular basis, we seem to be on track."
The commissioner is expected to give Vanderbeek a few more weeks to complete a financial restructuring but will not wait until the Aug. 14 deadline passes, sources said.
The NHL would likely force him out sooner to give suitors enough time to study the team's financials and make an offer to lenders before the bankruptcy deadline, according to sources.
Moreover, new investors may not want to buy the team and leave Vanderbeek in charge, sources added.
Faced with losing control of the team, Vanderbeek also could decide to put the Devils into bankruptcy and buy himself several months to arrange a restructuring plan.
Thanks to their success on ice this year, when the team staged an upset win over the New York Rangers in the Eastern Conference Championships, the Devils could go from losing $20 million in the regular season to almost breaking even next year, sources said.
The Devils declined to comment, while the NHL did not return calls.