Although the Edmonton Oilers’ ownership group — led by Alberta billionaire Daryl Katz — failed to complete their desired purchase of the OHL’s Erie Otters, it seems that the connection between the two is far from over.
The Otters filed for Chapter 11 bankruptcy on Wednesday morning, announced the Erie Times-News, spurred on by the team’s desire to halt a forced sale of the Otters to Katz in order to ‘collect on a $4.6 million debt’.
Sherry Bassin, current owner of the major junior hockey team, reportedly owes the $4.6 million to Katz and the Oilers’ ownership group from earlier in the season — which was claimed to have been given to Bassin as a way to force his hand later in the sale of the Otters to Katz. Although the Katz ownership group has failed to offer up a spokesperson to comment on the situation, it is believed that Katz has plans to purchase the Otters in an attempt to move them to Hamilton.
According to the Erie Times-News, the team remains solvent — meaning they currently possess the funds needed to operate under normal hockey operations and meet the team’s required payroll — and the bankruptcy petition will have no effect on the team’s regular season or playoff operations. Rather, the petition simply serves as a way to halt any legal actions that could be taken by Katz to gain the money back; as there have been reports that the Oilers ownership is suing Bassin and the Otters for the $4.6 million, this would halt (at least temporarily) any pending lawsuit and subsequent demands by Katz and the Oilers.
This isn’t the first time the two teams have been linked in the news, particularly since the desire to move the Otters to Hamilton is a rumor spurred on by the theory that Katz would use possession of a lease agreement with Hamilton’s Copps Coliseum as a way to force his hand in Edmonton re: a new arena to replace Rexall. Going by this theory, Katz would be able to use a ready, leased arena in his possession as a way to threaten temporary relocation of the Oilers to Hamilton as a bargaining chip while discussing the new arena; the plans have (to this point) been met with resistance due to disputes with government funding for the structure..
Major junior teams are relocated with somewhat less fanfare than NHL teams (there’s currently a shuffle of major junior and minor league teams throughout greater Ontario and Manitoba, as a handful of teams were purchased and relocated this spring), but the reported resistance on the part of Bassin and the Otters ownership group in regards to making a sale of the team to Katz suggests the deal doesn’t look like a favorable option for at least a chunk of the parties involved.
It’s interesting to note that this isn’t the first time a bid to purchase a franchise by Katz has been met with resistance by the club. In 2007, Katz made a reported four separate bids to purchase the Oilers before finally receiving word that the team’s previous ownership group, the Edmonton Investors Group, had agreed to sell. His bid had initially been worth an estimate $155 million; when he finally gained ownership of the franchise, he had paid $200 million.
By filing for Chapter 11 bankruptcy, the team will be able to pursue a sale of the club without interference from either Katz or the Ontario Major Junior Hockey Corporation.