On a good day, a normal bankruptcy is a dizzying swirl of details.
Add in the economic life and death drama of Sacramento trying to keep it’s NBA team and well – dizzying doesn’t cover it.
After the mayor announced in his State of the City address Thursday that his group of local investors intends to buy the small share of the Kings in bankruptcy court, Kings fans were left hoping to hear something like this: “Judge Klein says, ‘I have this bid are there any higher bidders? Hearing no bids… sold!'”
But after reviewing filings in the bankruptcy case involving a seven percent interest in the Kings, certified bankruptcy specialist Gary Fraley has some warnings for those eager to see the team stay on its throne.
First, he says remember any sale is about the creditors – not a city’s allegiance to it’s team.
“They’re going to look at this having been done in a way that maximizes return to the estate,” Fraley said Friday.
April 1 and then the fourth are the deadlines for bids on Bob Cook’s share of the Kings and then for those bids to be evaluated by the bankruptcy trustee.
Next, the trustee will have two paths to choose from.
One would proceed straight to auction and then let other limited and general partners decide if they want in the game.
On the other path, April 19 would be the last day for limited partners to bid, May 6 for general partners.
“You don’t want someone else to come in and upset the apple cart,” said Fraley.
But he says if no partners bid, a surprise bidder could do exactly that – putting a kink in part of the mayor’s plan for the Kings.
While one sale scenario starts with an auction April 9th, the other starts the days after another important April benchmark.
The NBA’s board of governors is set to decide who gets to buy controlling interest in the Kings on April 18th – that will clear up a lot.