In an e-mail to key staffers this afternoon, Nashville Predators majority owner David Freeman explained the cause of a recently reported federal tax lien.
News of the lien emerged in the wake of the Nashville Hockey Club's decision last Wednesday to terminate the naming-rights contract with the Sommet Group in the last year of a three-year agreement. In a Chancery Court filing, the club said Sommet had not met its obligations under the deal.
Sommet's managing partner Brian Whitfield told The Tennessean the move "surprised" him because the IRS filed a $3.3 million lien against Freeman.
In his e-mail today, Freeman said he ran into "liquidity problems" because he bailed out the club when a fellow Preds investor, the controversial William "Boots" Del Biaggio III, filed for bankruptcy.
"I ... loaned the Predators several million dollars on a 'short-term' basis in 2007 to complete the purchase of the team. Due to subsequent events eventually culminating in the bankruptcies of parties associated with the team, it has become appropriate for me to convert my loan into an additional permanent investment in the club," the e-mail reads, in part. "Unfortunately, reacting responsibly to the acts of others in a manner most beneficial to the team created a short-term liquidity problem for me."
Freeman goes on to say he is liquidating other assets and is working with the IRS to pay off his outstanding tax obligation.
Freeman calls the lien "a personal matter" and said the Predators are on their way to stabilization.
"Stabilizing the Predators was never envisioned as an easy task, a quick task, or a task without personal sacrifice. The task is proceeding well, is proceeding on course, and is actually enhanced by reduced debt on the team," he wrote.
The Metro Sports Authority is set to discuss the arena naming-rights deal at a special meeting scheduled for 9:30 a.m. Thursday.
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