AEG Sues Boots
AEG Facilities has joined the list of entities filing lawsuits against investor William "Boots" Del Biaggio III, who had a contract with AEG to bring an NHL team to Kansas City, Mo.’s Sprint Center – and has racked up debts totaling about $70 million.
On June 6th, Del Biaggio filed for bankruptcy, a week after the San Jose Mercury News reported that his business dealings were being examined by federal investigators. Days before, he announced his departure from Sand Hill Capital, a company he founded in 1997.
His attorney said Del Biaggio has about $50 million in assets. Three investment funds he managed also filed for bankruptcy with debts of $23.3 million owed to investors and approximately $2.7 million in assets.
The lawsuit filed by AEG Facilities claims that Del Biaggio doesn’t have the funds to pay back a $7 million loan obtained last year and that he lied about the collateral used to obtain the loan.
In addition to Del Biaggio, the lawsuit names Merriman Curhan Ford, a San Francisco investment bank; and D. Scott Cacchione, a former managing director at the firm, according to the San Jose Mercury News.
Del Biaggio, who was a minority investor in the San Jose Sharks and once planned to buy the Pittsburgh Penguins, took out the loan to invest in the Nashville Predators hockey team in which he eventually bought a 27 percent stake. The team was sold for $193 million.
The investor used three accounts at Merriman for collateral for the loan but, according to the lawsuit, AEG said two of those accounts didn’t belong to Del Biaggio.
Security Pacific Bank of Los Angeles sued Del Biaggio the first week of June, and has accused the investor, Merriman and Cacchione of "blatent deceit" regarding a $5 million loan taken out in April.
Valley Community Bank of Pleasanton, Calif., filed a lawsuit against Merriman and Cacchione, but didn’t name Del Biaggio, who was an early investor and director of the bank, according to the San Jose Mercury News. The lawsuit claims Del Biaggio obtained a $4.2 million loan from the bank in February by using fake accounts at Merriman.
According to the San Jose Business Journal, Modern Bank of New York, DCB Investments, The Private Bank of the Peninsula and Heritage Bank of Commerce – which Del Biaggio started with his father in the 1990s – are also suing Del Biaggio.
Del Biaggio also owes former Predators owner Craig Leipold $10 million, according to the Tennessean. The paper noted that the Predators have said Del Biaggio’s problems will have no impact on their operations and that the team’s other owners are considering buying out Del Biaggio’s interest or finding another investor to replace him.
The Metro Sports Authority – which acts as the landlord for Nashville’s Sommet Center, the home of the Predators – is set to hold a meeting June 13th to consider the city’s options for legal action.