The reigning Eastern Conference Champions likely won't face bankruptcy, despite the passing of an August 14 deadline to settle over $77 million in debt, according to New Jersey Devils blog Fire & Ice. What's with the sudden patience from lenders who now have the legal right to force managing partner Jeff Vanderbeek and the franchise into bankruptcy? A quiet restructuring of that $77 million figure, according to Fire & Ice:
A source said Vanderbeek has already worked the debt down to less than $35 million and raised roughly half of that remaining figure, leaving him needing about $18 million more to fully cover what the team owes the banks. If the lenders were to push the team into bankruptcy, they would likely recover much less than that. That gives them every reason to give Vanderbeek the time he needs to raise the rest of the money the team owes.
Fire And Ice (via Sports Business Journal) also note that the benefit - and perhaps the only one for anyone in hockey - to the looming uncertainty of CBA negotiations with the NHL and the NHLPA is that the banks are reportedly willing to wait until the CBA is settled before making a move on the Devils. The chief reason for the CBA to be settled first is that ownership of the franchise would land with the NHL itself if the Devils were declared officially bankrupt.
The window of the CBA and the reported lessening of the total debt presumably gives Vanderbeek time to find new investors to cope with the loss created when Brick City, LLC backed out of its 47 percent stake in the franchise, a move that created the debt uncertainty.