The Erie Otters, a hockey team, filed Chapter 11 bankruptcy recently according to an April 8, 2015 article on GoErie.com. The team owes $4.6 million to another team, the Edmonton Oilers. The Oilers are trying to force the Otters to sell themselves in order to pay that debt. This bankruptcy would allow the Otters to have a stay placed on the debt they owe the Oilers so that the Otters cannot be required to sell their team along the terms of a court order. Usually, companies file for bankruptcy protection when they are not financially solvent. In other words, companies file bankruptcy once they cannot pay their expenses. The team can pay its salaries and expenses, so this is an atypical bankruptcy.
A Chapter 11 bankruptcy is called a â€œrestructuringâ€ bankruptcy. That means that the party filing for bankruptcy must restructure and, often, reduce its debts. The hockey teamâ€™s owner could then sell the team, getting a better deal than what a court-ordered forced sale might provide.
Also, while the hockey team is under bankruptcy protection, its assets cannot be sold by the creditor team, which was planning to do so.
The Erie Otters filed papers in court so that the judge will approve a trustee for the case. The Erie Otters are expected to play a playoff game soon. If their bankruptcy is approved, then they may not have to pay what they owe to the Oilers and may be able to sell their team as well.
Jayson Lutzky is a New York bankruptcy attorney. He files Chapter 7 bankruptcy for individuals. Mr. Lutzky has over 31 years of experience practicing law. He has a conveniently located office in the Bronx. The attorney offers free in-person consultations. Call 718-329-9500 to set up an appointment. Saturday appointments are available. Visit www.MyNewYorkCityLawyer.com to learn more about Mr. Lutzky.