Kings’ Sale Cleared by Bankruptcy Judge : Hockey: Deal could be final Tuesday. Former financial officer Waks charged in McNall scheme.
Perhaps it was fitting that the bankruptcy court approval hearing of the sale of the Kings on Thursday mirrored the entire transaction--painstakingly slow and filled with surprises.
But after more than seven hours and two recesses, U.S. Bankruptcy Court Judge Lisa Hill Fenning approved the sale of the team for $113.25 million from Jeffrey Sudikoff and Joseph Cohen to Denver billionaire Philip F. Anschutz and local developer Edward P. Roski Jr. The Kings voluntarily entered Chapter 11 bankruptcy proceedings on Sept. 20.
Additionally, Fenning approved the settlement involving Bruce McNall’s bankruptcy trustee R. Todd Neilson, who controlled 28% of the team. McNall’s creditors will receive $7.25 million.
All parties involved are working to close the deal--which is expected to happen on Tuesday, according to Majestic/Anschutz Venture attorney David Rogers. The new owners also pledged to make a capital infusion of $30 million and to take care of any fans still needing refunds.
A particular urgency was stressed by almost everyone in the courtroom, in which there were almost 40 lawyers on hand. “The Kings will run out of money if this deal isn’t done,” said Bennett Silverman, an attorney for LAK Acquisition Corp. “I’m reluctant to say when, but it’ll be a lot sooner than later.”
Meanwhile, just as the Kings were being sold again, there was the shadow of McNall. Blocks away, federal prosecutors on Thursday charged his former chief financial officer, Suzan A. Waks, with single counts of bank fraud, conspiracy and tax evasion.
Waks, the 10th person to be charged in the wide-ranging scheme, held a high-profile position in the sports world, helping negotiate McNall’s purchase of the Kings in 1988 and his acquisition of Wayne Gretzky as well as the Toronto Argonauts of the Canadian Football League in 1991.
“In these types of cases, usually knowledge and culpability is confined to a few people in the upper levels of the company, and they usually insulate people below them,” said Assistant U.S. Atty. Peter S. Spivack. “So to see the fact that nine people have pleaded guilty, that in itself is significant how widespread the knowledge of the fraud is.”
Waks faces up to 40 years in prison and a maximum fine of $1.5 million. She is the first of the group to be charged with tax evasion, allegedly attempting to evade $19,000 in income tax in 1990 as well as falsely claiming $66,676 in depreciation expenses relating to purported ownership of two thoroughbred horses.
As for McNall, his name was mentioned often in bankruptcy court even though he wasn’t there. McNall’s ex-wife Jane Cody raised one of the stronger objections to the transaction because his employment contract is not being assumed by the new owners.
“I have a job in which I make less than $75,000, and it ends in four years,” she said. “I have a 10-year old and a 12-year old and an ex-husband who is going to jail. And I’m going to need support.”
Other objections were raised by McNall’s bankruptcy attorney Richard L. Wynne, First Los Angeles Bank, the law firm of Irell & Manella and a former season-ticket holder, Don Smith of Northridge, who said he won a $2,490 judgment against the Kings in small claims court.
Said the 44-year-old Smith: “I came down here in my small claims clothes. It’s so easy to get lost in something like that. That’s why the fans are just left out.”
But Smith had a discussion with MAV attorney Rogers. “I told him I would sign a check for him and get it in the mail when the sale closes on Tuesday,” Rogers said. “And I’ll send him some tickets too.”