How soon Minnesota Wild owner Craig Leipold and AEG Facilities get their money back from bankrupt Nashville Predator owner William “Boots” Del Biaggio will be decided by a San Francisco bankruptcy judge Jan. 28.
A criminal case was filed against Del Biaggio in early December, charging the San Jose investor with one count of securities fraud involving $48 million in loans and nearly $55 million in loan guarantees, according to the San Jose Mercury News.
He is accused of fraudulently obtaining the millions in loans to purchase his 27 percent share in the Predators, which was sold for $193 million.
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.
Leipold and AEG, which owns the Los Angeles Kings, loaned Del Biaggio $17 million – $10 million and $7 million respectively – to help him purchase his share of the Predators. The Toronto Star reported that Leipold and AEG Facilities will argue a portion of the money owed is “secured,” which means they’d be the first to get their cash back in their pockets if the bankruptcy court sells Del Biaggio’s share of the Predators.
Leipold attorney David Rosenbloom said his client only wants his $10 million back and is not interested in owning any share of the Predators.
Del Biaggio’s 27 percent share of the Predators could reportedly be worth about $40 million. Bankruptcy trustee R. Todd Neilson is in charge of selling the share to the highest bidder.
One potential buyer is Canadian billionaire Jim Balsillie, who was interested in buying the team but his offer fell through because he wanted to move the Predators to southern Ontario.
The count of securities fraud filed against Del Biaggio carries a maximum 25-year prison sentence, according to the Mercury News. The case could end with a grand jury indictment and trial or a plea bargain.