Modern Bank N.A., based in New York City, has filed a lawsuit in the Superior Court of California seeking the return of $10 million borrowed by William "Boots" Del Biaggio for the purchase of buying a stake in the Nashville Predators.
Also named as defendants are his wife Kristen Del Biaggio, and David Scott Cacchione, a managing director with San Francisco-based investment bank Merriman Curhan Ford & Co., which is also named.
According to the 27-page filing, the Madison Avenue bank is seeking to recover $10 million that it loaned Del Biaggio in November of 2007 for the purpose of acquiring a portion of the Nashville Predators. The basic complaint is that "the account, which was pledged as the sole source of collateral for the loan, never belonged to Mr. and Mrs. Del Biaggio and the loan – which remains unpaid – procured by fraud."
The bank discovered something was up when Del Biaggio failed to provide monthly account statements as obligated under the loan agreement. After unsuccessful attempts to obtain the statements, Modern Bank contacted Merriman Curhan only to discover that the account in question "did not and does not belong to Mr. and Mrs. Del Biaggio."
The complaint alleges that documents used to obtain the loan contained false information and were the product of forgery, aided by Cacchione.
Bottom line: According the bank that loaned him the money, Boots bought his share of the Nashville Predators by lying to get the cash.
While fans of the hockey team might be apoplectic over yet another off-season of turmoil surrounding their beloved Preds, this news isn't as bad as 2007's threat of relocation.
Last year, the team had an uncertain lease arrangement that ownership claimed was costing them dearly. That issue has since been resolved.
There was an owner in Craig Leipold, who was anxious to unload the team and get out of town. He is now back in Minnesota and ensconced with a different team, the Minnesota Wild, and the Preds are controlled by local business leaders.
Attendance was down and the team sold off its more expensive players, leaving many to think that the Preds would be back at the bottom of the NHL. Instead, attendance is on the uptick and the players shocked everyone by making the playoffs.
As of today, Del Biaggio owns roughly a quarter of the team and will likely need to sell his share fast. He needs capital and obviously the hockey team is an asset he can do without.
Since everyone knows he will be selling, he will not be getting Leipold-like numbers for his stake. Think of it as a fire sale on ice.
The remaining ownership group includes including locals David Freeman, Christopher Cigarran, Thomas Cigarran, Joel and Holly Dobberpuhl, DeWitt Thompson V and John Thompson, and California resident Warren Woo. It is highly likely that these individuals will each take a piece of Del Biaggio's share and not bring another partner into the mix. But even if they don't, they can split the shares on sale up as many ways as they like. They aren't looking for and don't need to find one deep pocket.
Finally, remember that the thought when the local ownership group got the team was that if they were unable to make ends meet over the next few years, Del Biaggio would buy everyone else out and move the team to Kansas City.
Obviously, that scenario can now be tossed out too.