Boots Case Marches On
In the ongoing investigation into the financial affairs of investor William "Boots" Del Biaggio III, the FBI served subpoenas to the NHL’s Nashville Predators, of which Biaggio owns the second-largest share, as well as the Metro Nashville Sports Authority and the Metro Council.
The Metro Council was ordered to produce documents and communications related to Del Biaggio’s "purchase or sale" of the Predators and his "finances or financial condition," according to the San Jose Mercury News.
"We will cooperate fully with the FBI," said David Freeman, the lead partner in the Predators’ ownership. "I can assure you that the allegations against Mr. Del Biaggio are as surprising to us as they are to you."
The FBI is investigating allegations that Del Biaggio fraudulently obtained millions of dollars in loans that he then used to purchase his 27 percent share in the Predators, which was sold for $193 million.
After announcing his departure from Sand Hill Capital, a company he founded in 1997, the investor filed for bankruptcy – and was hit with multiple lawsuits from creditors.
Del Biaggio, who was a minority investor in the San Jose Sharks and once planned to buy the Pittsburgh Penguins, has debts totaling about $70 million and his attorney said he 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.
According to the lease at the Sommet Center, the Predators’ owners have 60 days from Del Biaggio’s bankruptcy filing to find a different investor to replace the approximately $9.8 million Del Biaggio guaranteed as lease protection in the form of liquidated damages.
The Sports Authority members were told by attorney Larry Thrailkill they could rule Del Biaggio in default of the city’s lease with the team because he lied about his assets – but Thrailkill advised members to give the other owners time to deal with the situation.
The authority agreed to hold off on action until a trustee is appointed to Del Biaggio’s case and the Predators’ owners have had a chance to discuss how to protect the team during the bankruptcy filings.
Del Biaggio and one of his creditors have requested the trustee be the same man who worked on Bruce McNall’s 1994 bankruptcy filing and disposing of his share of the Los Angeles Kings hockey team.
AEG Facilities, which had a contract with Del Biaggio to bring an NHL team to Kansas City, Mo.’s Sprint Center, claims that the investor doesn’t have the funds to pay back a $7 million loan obtained last year and didn’t own all of the collateral used to obtain the loan.
In addition to Del Biaggio, the lawsuit names San Francisco investment bank Merriman Curhan Ford and D. Scott Cacchione, a former managing director at the firm, according to the Mercury News.
Security Pacific Bank of Los Angeles sued Del Biaggio over a $5 million loan taken out in April and Valley Community Bank of Pleasanton, Calif., filed a lawsuit against Merriman and Cacchione, claiming that Del Biaggio obtained a $4.2 million loan from the bank 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.
He also owes former Predators owner Craig Leipold $10 million, according to the Tennessean.