September 16, 2011 7:20 PM
The Score: Vikes Push for New Stadium; Stars File for Bankruptcy
Posted by Brian Baxter
The Minnesota Vikings quest for a new stadium got a renewed sense of urgency last December when the roof of the team's current home collapsed after a snowstorm.
The National Football League franchise has since ramped up its efforts to construct a new facility in suburban Arden Hills, Minn., by throwing its weight behind a proposal to raise the sales tax by a half-cent in local Ramsey County to generate $350 million toward the project's estimated $1 billion price tag.
Cost overruns, however, could push the price of replacing the nearly 32-year-old Metrodome significantly higher, according to a report this week in the Minneapolis Star-Tribune. The Vikings would incur the cost of those overruns, but stadium backers fear a public referendum on using public funds could doom the deal.
There is some political opposition to using any public funds—Minnesota governer Mark Dayton has already agreed to kick in $300 million from state coffers—to build another sports facility in Minneapolis, which last year saw new stadiums open for the Minnesota Twins baseball team and University of Minnesota's college football team. Local residents will get the chance to weigh in on the matter at a pair of public hearings scheduled over the next month before the Ramsey County Charter Commission.
Helping spearhead the Vikings stadium push is Kevin Warren, the team's chief administrative officer and vice president for legal affairs. Warren says that the Vikings have retained the services of three outside law firms to handle various aspects of the stadium initiative.
Minneapolis-based Faegre & Benson, which has served as longtime outside counsel to the team, is representing the Vikings through corporate partner William Busch and real estate partner Paul Moe. David Johnson, a government relations partner at Minneapolis firm Best & Flanagan, has taken the lead on the team's legislative efforts. And Skadden, Arps, Slate, Meagher & Flom project finance partner Martin Klepper in Washington, D.C., who advised the current Vikings owners on their financing and purchase of the team six years ago, is working on helping the team secure the financing for a new stadium.
Warren got his current job with the Vikings through his previous role as of counsel at Greenberg Traurig in Phoenix. In tandem with Skadden, the firm had an active role in advising on the $600 million sale of the Vikings in May 2005 from former owner B.J. "Red" McCombs to the current ownership group led by shopping male magnate Zygmunt Wilf.
McCombs announced plans earlier that year to sell the NFL franchise to Arizona businessman Reggie Fowler. But Fowler's bid hit a snag over financing issues and the Vikings were subsequently sold to Wilf. (McCombs turned to Michael Kreager from San Antonio's Kreager Law Firm for counsel on the deal, which saw Fowler become part of the new ownership group.)
Warren himself has a long history in pro football, having previously served as general counsel for the Detroit Lions and vice president of player programs and administration for the St. Louis Rams during their Super Bowl winning season in 1999. The Vikings hired him away from Greenberg Traurig after Wilf took control of the team in the summer of 2005.
Since then, Warren has focused on helping the Vikings manage their day-to-day business operations, handled all the team's legal matters, advised on special projects and strategic planning issues, and even dealth with the fallout from off-the-field actions by a few wayward players.
Lee Mehrkens, chief financial officer for Ramsey County, told us that Phil Carruthers, director of the civil division in the county attorney's office, is advising local government officials on the Vikings stadium issue. Earlier this year, Dayton announced the appointment of former state legislator Ted Mondale to chair the Minneapolis Sports Facilities Commission. Mondale is another key cog in the stadium debate.
His father, former U.S. vice president and Democratic presidential nominee Walter "Fritz" Mondale, is currently senior counsel with Dorsey & Whitney in Minneapolis. The American Lawyer recently named the elder Mondale one of its Lifetime Achievers.
More Team Bankruptcy Battles
Another week, seemingly another bankruptcy battle involving a team from one of North America's major professional sports leagues. The National Hockey League's Dallas Stars filed for bankruptcy in Delaware late Thursday in order to facilitate a sale to Vancouver hotel honcho Tom Gaglardi. The team expects the auction process to take between 60 to 75 days, according to news reports.
Weil, Gotshal & Manges is taking the Chapter 11 ice for Stars owner and private equity pioneer Tom Hicks in the latest bankruptcy case for one of his sports team holdings. Last year Weil advised Hicks and his Hicks Sports Group on the bankruptcy of Major League Baseball's Texas Rangers, which were sold through a similar auction in August 2010.
Bankruptcy partner Martin Sosland, who took the lead in the Rangers case, and corporate partner Glenn West, a longtime legal adviser to Hicks, are heading up a team from the firm advising the Stars that includes bankruptcy partner Ronit Berkovich, tax partner Jared Rusman, employee benefits partner Michael Kam, IP partner Karen Ballack, environmental partner Annemargaret Connolly, and antitrust counsel John Sipple.
Weil, which has had its hands full over the past year unwinding Hicks's sports holdings, also advised on the $500 million sale in October 2010 of storied English Premier League soccer team Liverpool FC. Hicks, a former leveraged buyout king whose debt issues have apparently caught up to him, bought the Stars for $84 million in 1995.
The prepackaged bankruptcy plan filed by the Stars on Thursday calls for the team to be sold to Gaglardi or any other bidder that could top his stalking horse bid in an auction. The purchase price for the team—whose lenders have been funding its operations since Hicks defaulted on $525 million in debt in April 2009—is in the range of $230 million, according to Forbes. (Last year Forbes valued the franchise at $227 million.)
Jim Rossiter, a veteran hockey dealmaker and corporate partner at Baker & McKenzie in Toronto, is leading a team from the firm advising Gaglardi on his proposed purchase of the Stars. Other Baker & McKenzie lawyers working on the matter include bankruptcy partner David Parham, banking and finance partner Ata Dinlenc, and tax partner Richard Lipton.
Latham & Watkins global insolvency cochair Mitchell Seider is representing JPMorgan Chase as administrative agent for a group of banks serving as first-lien creditors and arranging financing for the sale of the Stars. Just as in the Rangers bankruptcy, partner Andrew Leblanc of Milbank, Tweed, Hadley & McCloy is representing first-lien lenders. Michael Lastowski, managing partner of Duane Morris's Wilmington office, is serving as local counsel to both groups.
Stars lenders have given support to the team's prepackaged bankruptcy plan, Bloomberg reports. The bankruptcy court and the NHL must approve any sale of the team, which wants to remain in Dallas. Court records show that the Stars owe nearly $51.7 million to an NHL affiliate. The team also owes $2 million to the New York Rangers to pay for the services of ex-winger Sean Avery.
Bankruptcy partners John Knight and Mark Collins from Delaware firm Richards, Layton & Finger are serving as local counsel to the Stars in their Chapter 11 case. Skadden corporate restructuring cochair J. Gregory Milmoe is advising the NHL, along with bankruptcy partner Mark Chehi and banking partner Thomas Gowan.
NHL deputy commissioner William Daly is a former Skadden associate and the firm has long served with Proskauer Rose as outside counsel to the league, having previously advised on the bankruptcy sale of the Phoenix Coyotes franchise two years ago.
The Stars aren't the only NHL team facing financial troubles. The New York Post reported this week that the New Jersey Devils had missed a $100 million debt payment on September 1, which could push the franchise into bankruptcy. The Devils strongly refuted the story; and a subsequent Forbes report suggested that lenders could not seize control of the team for nine months.
Turning to baseball, the Los Angeles Times reports an attorney with the U.S. trustee's office in Delaware has lodged an objection to a fee request by Dewey & LeBoeuf in the bankruptcy case of the Los Angeles Dodgers. Dewey submitted bills last month seeking $1.7 million for five weeks of work representing the venerable baseball team in the Chapter 11 case, according to our previous reports.
U.S. trustee Mark Kenney asked the court to slash fees to Dewey and Delaware counsel Young Conaway Stargatt & Taylor by 21 percent, Bloomberg reports. Kenney said the two firms billed $352,742 for work that was unnecessary, although a Dodgers spokeswoman called the fees "consistent with appropriate billing practices."
Around the Horn
—William Neukom III, a former ABA president and erstwhile K&L Gates partner, announced this week that he will step down as managing general partner of the ownership group in charge of the San Francisco Giants. Neukom served as Bill Gates's go-to lawyer for decades, serving as general counsel for Microsoft from when it was a startup, a position that helped him cash out a $107 million stake that he later invested in the baseball team by the bay.
—Members of the National Basketball Player's Association pledged their solidarity this week, after union president Derek Fisher issued a letter urging his members to get in line, amid reports of a group of player agents intent on pursuing a decertification track as labor talks with the league stalled. Earlier this month, the union took steps to add to its Dewey-led legal team for a suit and unfair labor claim filed by the NBA in August. Court records show that the NBPA has hired Steptoe & Johnson litigation partners James Hibey, Steven Wheeless, Evan Glassman, and special counsel Alexis Hunter, as well as labor and employment head Lawrence Katz. Hibey joined Steptoe earlier this year from now-defunct Howrey. Skadden's Jeffrey Mishkin and Bancroft's Paul Clement are advising the NBA in the litigation.
—Washington Redskins owner Daniel Snyder and his lawyers from Glaser Weil and McDermott Will & Emery have finally dropped their libel suit against the Washington City Paper over this story by the alternative weekly, according to sibling publication The National Law Journal. Snyder had recently admitted to The New York Times that he had never read the story.
—Glaser Weil litigation chair Patricia Glaser had some success this week representing another sports team owner. The Associated Press reports that a L.A. Superior Court judge rejected a suit filed against Indianapolis Pacers owner Herb Simon and his wife by a former nanny who claimed she was fired by the couple after she became pregnant. Glaser represents the Simons in the case.
—Much has been made lately about the sad series of deaths of several former NHL enforcers, such as Bob Probert, Derek Boogaard, Wade Belak, and Rick Rypien. Grantland's Chris Jones caught up with A. Stuart Grimson, better known as Stu Grimson from his fighting days on NHL ice, who is now of counsel with Kay, Griffin, Enkema & Colbert in Nashville. Grimson's story of adapting to life after hockey is well worth a read.
—This story from The Commercial Appeal in Memphis is more than just another 9/11 retrospective. Dan Gritti was an associate at Littler Mendelson in New York and witnessed the terrorist attacks. Unhappy with the corporate law lifestyle, he ditched it to pursue coaching football, a pursuit that at one point left him back on his parents' couch. Ten years later, Gritti is enjoying life on the gridiron.
—And in case you missed it, The Am Law Daily reported this week on the settlement of a $195 million malpractice case between King & Spalding and the ownership group that used to control the NHL's late Atlanta Thrashers and NBA's Atlanta Hawks, as well as on Squire, Sanders & Dempsey's role helping longtime client LeBron James scuttle a paternity suit filed by a former Am Law 100 associate.Make a comment