Lemieux Changes His Plan

Mario Lemieux modified his reorganization plan for the bankrupt Pittsburgh Penguins by announcing Tuesday he will convert $20 million he is owed by the club to equity in the franchise, forgive the remaining $7.5 million in debt and forgo any up-front or deferred payments from the club.

Under his previous plan, Lemieux would have received immediate and deferred payments. Some creditors had objected to those provisions.

A hearing is scheduled for Friday in U.S. Bankruptcy Court in Pittsburgh on whether to submit to creditors Lemieux’s plan, a plan submitted jointly by SMG and Fox, and a worst-case plan devised by the NHL that would lead to the club’s dissolution or a sale and move. Lemieux rejected the SMG/Fox plan, which would have cast him in a minor role.

Lemieux’s new bid also contains an offer to buy out the club’s lease with SMG for fair market value and to continue its relationship with broadcast rights holder Fox Sports Net Pittsburgh. The lease has been an obstacle, because it binds the team to the Civic Arena through 2007 at a rent of more than $6 million a year.

“With this offer, I’m committing all that I’m owed because of my firm belief that my new plan will ensure that the Penguins will be restored to financial stability while maintaining their competitive-quality play right here in Pittsburgh,” Lemieux said.

The NHL maintained its support of Lemieux. William Daly, the league’s vice president of legal affairs, said the SMG/Fox plan was unacceptable because it involves cross-ownership of teams--Fox also has an interest in the New York Rangers--and doesn’t provide for the infusion of enough operating capital.