The Nashville Sports Authority signed off on revised personal guarantees from owners of the Predators today. This was a necessary step after one of the owners defaulted in June.
The out-of-town member of the group, Boots Del Biaggio, declared bankruptcy and is under investigation for fraud.
The personal guarantees are a form of collateral. If the team leaves before its lease expires, it would have to reimburse Metro for as much as 30-million dollars.
The local owners split up Del Biaggio’s 10-million dollar guarantee. Each owner’s accountant signed off that his net worth exceeds twice his new share of the guarantee. But the Sports Authority doesn’t have financial statements from the owners to verify what their net worths entail.
Sports Authority member Steve North says it’s possible and even likely that some of them are now using their stake in the team to count toward their guarantee. Meaning, if the team left town, Metro could own a stake in a hockey club in some other part of the country. Even worse, North says, is what would happen if the team goes belly up.
“If the Predators somehow fail, then those guarantees are going to be awful hard to collect.”
North voted against the lease agreement earlier this year, saying at the time it was overly complex. He says this situation proves his point, but he voted to approve the personal guarantee changes today because they do comply with the new lease.
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