Last year, Dallas Stars chief financial officer Robert Hutson gave a 95-page declaration in support of the team’s Chapter 11 petition (the team was eventually sold out of bankruptcy to Vancouver businessman Tom Gagliardi). It provides an interesting look at how things can quickly spiral out of control for a team when debts pile up, especially when confronted with unforeseen events. This part really jumped out at me:
It goes on to describe how cash flow deficiencies ultimately prevented the team from servicing its long-term debt obligations.
I’m sure the global economic downturn and subsequent locking up of credit markets had a lot more to do with the Chapter 11 move than the lockout, but it’s still pretty interesting that the problems began back in 2005. Makes you wonder how some of the league’s weaker franchises are coping with the current work stoppage.
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